Prices of food, fuel, and other consumer goods likely grew at their slowest pace on record in July, fueling speculation that the central bank would keep interest rates at current levels till yearend.
Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. on Monday said inflation “could remain low” in July “following the significant deceleration in June.” Fuel prices and lower power rates were tagged as the main factors for this.
“The BSP will continue to monitor domestic and global developments to ensure that the policy stance remains supportive of price stability conducive to a balanced and sustainable economic growth,” Tetangco said in a statement.
Inflation, or the average rise in consumer prices, likely settled between 0.5 and 1.3 percent in July from June’s record-low of 1.2 percent. The July forecast would mark the third consecutive month that inflation averaged below the BSP’s full-year target of 2 to 4 percent. Inflation stood at 1.6 percent in May.
The central bank’s main goal is to protect consumers’ purchasing power by keeping prices stable and within target, which is done mainly through interest rate adjustments.