Banko Sentral ng Pilipinas predicts inflation rate to range from 3.7% to 4.5% in May 2024

The Bangko Sentral ng Pilipinas (BSP) has projected that the Philippines’ inflation rate for May 2024 will fall within the range of 3.7% to 4.5%. According to a press release from the central bank, the potential increase in inflation is attributed to rising electricity rates and vegetable prices, as well as recent depreciation of the peso.

In contrast, lower prices of rice, fish, and fruits, along with a decrease in domestic oil and LPG prices, may help counterbalance the upward price pressures for the month.

Meralco announced an increase in power rates for May due to higher generation charges from the Wholesale Electricity Spot Market and Power Supply Agreements. While oil prices experienced a rollback in the first two weeks of May, only gasoline prices were slashed in the third week.

The BSP’s low-end prediction for May’s inflation rate is slightly lower than the 3.8% recorded in April 2024, while the high-end prediction represents a more significant increase from the previous month.

To address the potential upward trend in inflation, the Monetary Board of BSP decided to maintain its target reverse repurchase rate at 6.5% during its meeting on May 16. This marks the fifth time the rate has remained unchanged since the off-cycle policy meeting in October 2023.

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