MANILA – Higher prices of fuel and agricultural products are expected to contribute to upside risks to the inflation rate this month, which the Bangko Sentral ng Pilipinas (BSP) sees between 5.3 percent to 6.1 percent.
In a statement on Friday, the central bank said upticks in electricity prices as well as weakness of the local currency are forecast as additional upside risks to the rate of price increases in the ninth month of this year.
These factors, however, are seen to be offset by the lower rice and meat prices during the month.
“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” the statement said.
The inflation rate reversed its six-month deceleration last August when it registered an uptick to 5.3 percent from 4.7 percent last July due mainly to higher food prices.
The average inflation in the first eight months this year stood at 6.6 percent, way above the government’s 2 to 4 percent target band.
Monetary authorities remain confident that the monthly level will decline to within the government’s target band in the last quarter of this year sans any price shocks. (PNA)