The Bangko Sentral ng Pilipinas (BSP) said inflation likely breached the upper-end of its annual target for a fourth straight month in April due to higher electricity rates and food prices.
Inflation during the month likely reached between 4.2% to 5%, BSP Governor Benjamin E. Diokno told reporters in a Viber message. This is above the 2-4% target of the central bank.
He said the BSP’s point inflation forecast for April is at 4.6%, which, if realized, will be faster than the 4.5% in March and the 2.2% a year earlier.
The April inflation data will be released by the Philippine Statistics Authority on May 5.
The increase in electricity rates of Manila Electric Co. as well as the higher prices of pork, fish, and rice may have led to faster inflation in April, Mr. Diokno said.
Meralco said households will likely see an increase of around P17 in their April electricity bill due to higher spot market prices. The utility firm said their overall rate rose by P0.087 per kilowatt-hour to P8.4067 per kilowatt-hour (kWh) from March.
A 60-day price cap on meat products in Metro Manila expired earlier this month. The price ceiling was implemented to curb soaring meat prices due to supply shortages caused by the African Swine Flu outbreak.
Meanwhile, the month also saw a decrease in oil prices as well as food items including fruits and vegetables as supply conditions improved. Mr. Diokno said these factors could slow down the increase in the consumer price index.
Global oil prices declined recently amid concerns a spike in coronavirus cases in some countries may affect global economic recovery.
In the domestic market, pump prices of gasoline, diesel, and kerosene have jumped by P7.60, P5.70 and P4.95 per liter, respectively, as of April 27 year to date.
“Moving forward, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” Mr. Diokno said.
The Monetary Board’s next policy-setting meeting is scheduled on May 13.
The central bank kept the key policy rate at a record low of 2% on its March policy review, citing the need to continue to support the economy’s recovery amid a surge in new coronavirus cases.
Inflation is expected to reach 4.2% this year, much higher than the 2.6% in 2020 due to higher food prices and a recovery in global oil prices. — Luz Wendy T. Noble