{"id":19995,"date":"2024-08-01T03:02:07","date_gmt":"2024-08-01T03:02:07","guid":{"rendered":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-sees-july-inflation-at-4-4-8\/"},"modified":"2024-08-01T03:02:07","modified_gmt":"2024-08-01T03:02:07","slug":"bsp-sees-july-inflation-at-4-4-8","status":"publish","type":"post","link":"https:\/\/energybuzz.ph\/staging\/6915\/bsp-sees-july-inflation-at-4-4-8\/","title":{"rendered":"BSP sees July inflation at 4%-4.8%"},"content":{"rendered":"
\n

By Luisa Maria Jacinta C. <\/b>Jocson, <\/b><\/span>Reporter<\/i><\/p>\n

HEADLINE INFLATION may have accelerated in July, possibly ending seven straight months of within-target in<\/span>f<\/span>lation, the Bangko Sentral ng <\/span>Pilipinas (BSP) said on Wednesday. <\/span><\/p>\n

The central bank\u2019s month-ahead forecast showed that inflation likely settled within the 4%-to-4.8% range in July.<\/p>\n

This would be faster than the 3.7% print in June. Inf<\/span>lation stood at 4.7% in July 2023.<\/p>\n

Inf<\/span>lation has been within the 2-4% target from December 2023 to June 2024.<\/p>\n

The central bank previously said that inflation could temporarily overshoot the target band in July before returning to target by August.<\/p>\n

The Philippine Statistics Authority is scheduled to release July inf<\/span>lation data on Aug. 6.<\/p>\n

\u201cHigher electricity rates along with the increased prices for agricultural commodities like vegetables, meat, and fruits along with higher domestic oil prices are the primary <\/span>sources of upward price pressures for the month,\u201d the BSP said.<\/span><\/p>\n

In July, households served by Manila Electric Co. saw an upward adjustment of P2.1496 per kilowatt-hour (kWh) in the electricity rate for the month. This brought the overall rate for a typical household to P11.6012 from the previous month\u2019s P9.4516 per kWh.\u00a0 \u00a0<\/span><\/p>\n

Pump price adjustments stood at a net increase of P1.30 a liter for gasoline for the month of July. Meanwhile, diesel and kerosene had a net decrease of P0.90 and P1.70, respectively, per liter.<\/p>\n

\u201cThese factors are expected to be of<\/span>fset in part by lower rice and fruit prices along with the peso appreciation,\u201d the BSP said.<\/p>\n

The average price of a kilogram of well-milled rice ranged from P45-P55 as of end July from P48-P55 at end-June. Regular milled rice was <\/span>priced at P45-P50 from P45-P52. <\/span><\/p>\n

Rice inflation eased to 22.5% in June from 23% a month ago, marking the third straight month of slower rice inf<\/span>lation.<\/p>\n

The peso appreciated to P58.365 per dollar on July 31, strengthening by 24.5 centavos from its P58.61 f<\/span>inish on June 28.<\/p>\n

WITHIN TARGET?
\n<\/b>Meanwhile, analysts expect inf<\/span>lation to accelerate month on month but still see it settling within the 2-4% target range.<\/p>\n

\u201cHeadline inflation may fall within target again in July, reaching 3.8%, with price pressures fading at a more favorable pace to start the second half of the year,\u201d Metropolitan Bank & Trust Co. (Metrobank) Chief Economist Nicholas Antonio T. Mapa said in the bank\u2019s latest Wealth Insights report.<\/p>\n

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort expects inflation to quicken to 4%, but still within the central bank\u2019s target band.<\/p>\n

Mr. Ricafort noted the inflationary impact from Typhoon Carina and the southwest monsoon.<\/p>\n

\u201cRealistically, there may be some temporary pickup in prices in hard-hit areas until logistics normalize, also in view on some damage on agriculture\u2026 that could lead to some transitory pickup in food prices,\u201d he said.<\/p>\n

The latest data from the Agriculture department showed that agricultural damage due to the typhoon and southwest monsoon hit P1.21 billion as of July 31.<\/p>\n

Rice was the most affected crop, accounting for more than half (52.47%) of the damage or P635.17 million.<\/p>\n

For the coming months, inf<\/span>lation is seen to ease further, with Mr. Mapa expecting the headline print possibly slowing to as low as around 2% by September.<\/p>\n

\u201cThis significant decrease is primarily due to the government\u2019s tariff reduction lowering rice prices, which heavily impacts the consumer price index (CPI) basket,\u201d he said.<\/p>\n

In June, President Ferdinand R. Marcos, Jr. signed an executive order which slashed tarif<\/span>fs on rice imports to 15% until 2028 to tame rice prices.<\/p>\n

\u201cThe combination of lower rice prices and favorable base ef<\/span>fects could push inf<\/span>lation towards the lower end of the central bank\u2019s target range. This trend suggests a potential shift towards a more stable price environment, which may influence future economic policies,\u201d Mr. Mapa added.<\/p>\n

The central bank is also expected to start cutting rates soon amid easing inflation, analysts said.<\/p>\n

\u201cThe BSP is anticipated to begin a cycle of interest rate cuts. This monetary policy shift could stimulate economic growth by encouraging new investments across various sectors,\u201d Mr. Mapa said.<\/span><\/p>\n

Mr. Ricafort said that the Monetary Board will likely cut by 25 basis points (bps) at its Aug. 15 meeting, especially if inflation remains within target.<\/p>\n

The Monetary Board has raised borrowing costs by a cumulative 450 bps from May 2022 to October 2023, bringing the key rate to an over 17-year high of 6.5%.<\/p>\n

BSP Governor Eli M. Remolona, Jr. has said they are on track to cut by August, for a total of up to 50 bps for the entire 2024.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

HEADLINE INFLATION may have accelerated in July, possibly ending seven straight months of within-target inflation, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","footnotes":""},"categories":[1],"tags":[19002,5796,14644,4285,15273,231],"class_list":["post-19995","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-4-4-8","tag-bsp","tag-bworldonline","tag-inflation","tag-july","tag-sees"],"yoast_head":"\nBSP sees July inflation at 4%-4.8% - Energy Buzz<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/energybuzz.ph\/bsp-sees-july-inflation-at-4-4-8\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"BSP sees July inflation at 4%-4.8% - 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