BSP forecasts May inflation at 2.8%-3.6%

The BSP complex in Manila (File Photo
By Ramon FVelasquez/Wikimedia commons, CC BY-SA 3.0)

MANILA — Higher jeepney fare in the Visayas, as well as upticks on selected food items are seen as risks to the May inflation, which the Bangko Sentral ng Pilipinas (BSP) projected to stay between 2.8 percent and 3.6 percent.

“Positive base effects” may also contribute to the “temporary price pressures” in the fifth month of the year, the central bank said in a statement released Friday.

This as the rate of price increases continues to decline after peaking at 6.7 percent in September and October last year.

Domestic inflation rate in May 2018 rose to 4.

5 percent from 4.3 percent in the previous month.

Average inflation last year exceeded the government’s 2 percent to 4 percent target band from 2018 to 2020 after it hit 5.2 percent.

Amid the upside risks seen for the month, the BSP said lower prices of rice and domestic oil, along with the cut in power rates, are seen to counter price pressures.

“Looking ahead, the BSP will continue to be watchful of evolving price trends to ensure that the monetary policy stance remains consistent with remaining price stability,” it said.

The continued deceleration of inflation has led the BSP’s policy-making Monetary Board to slash the central bank’s key policy rates by 25 basis points early last month and analysts project more cuts in the coming months as inflation is seen to continue its downtrend.