MANILA -- Higher utility rates along with upticks in the prices of petroleum products are seen to contribute to a further increase in the country's inflation rate in July 2018, to a range of between 5.1-5.8 percent.
The higher utility rates are for areas being serviced by the Manila Electric Company (Meralco), Maynilad Water Services Inc. and Manila Water Company Inc.
In a statement Tuesday, the Bangko Sentral ng Pilipinas (BSP) said its Department of Economic Research (DER) also cited as contributing factors to higher inflation projection this month the increase in jeepney fares, scheduled increase in tobacco excise tax as well the increase in the prices of rice and other agricultural commodities.
These factors are, on the other hand, seen to be countered by the “slight downward adjustment in domestic diesel prices for July.”
“Going forward, the BSP will continue to keep a watchful eye on the risks to the inflation outlook and will take necessary action to help ensure that inflation expectations remain firmly anchored to the target,” the statement added.
Last June, rate of price increases rose to multiyear high of 5.2 percent, up from month-ago’s 4.6 percent.
To date, inflation averaged at 4.3 percent, higher than the government’s two to four percent target.
Monetary officials expect inflation to remain elevated this year but to go back to within-target levels in 2019.
Inflation is seen to decelerate starting in the year's third quarter. (PNA)
