The rate of increase in the prices of basic commodities is expected to settle between 2.1 and 3 percent this month, due mainly to the softening of oil prices in the world market and the slight appreciation of the peso against the US dollar, according to the Bangko Sentral ng Pilipinas.
BSP Governor Amando Tetangco Jr. also said yesterday that the April inflation rate could have been slower than the rate recorded in March if not for increases in utility charges and transport fares that offset the impact of lower prices of international oil and domestic fuel products and the peso appreciation.
The estimated April rate, however, is much slower than the 4.7 percent recorded in the same month last year.
And if the estimate materializes, the inflation rate for the first four months of this year would hit around 3 percent.
The latest inflation report by the National Statistics Office said consumer prices rose by 3.1 percent in the first quarter of the year, well within the expected range this year of between 3 and 5 percent.
The peso settled at an average of 42.86 against the US dollar in March. The local currency has so far stayed within the 42-to-a-dollar territory this month, but has slightly strengthened. It closed at 42.53:$1 on Thursday.
An increase in the value of the peso against the US dollar makes imported goods cheaper in local currency terms, thereby pulling down the increase in overall consumer prices in the country.
Tentangco said the central bank would continue to monitor factors that will affect inflation, such as the movement of global oil prices, to determine whether there is a need for some policy adjustments to keep inflation within an acceptable range.
Global oil prices largely affect consumer prices in the Philippines since the country imports over 90 percent of its oil requirements.
So far this year, the BSP has cut its key policy rates by a total of 50 basis points. The first 25-basis-point cut was done in January and the second in March.
Officials said the cut in the policy rates, which influence commercial interest rates, was meant to spur demand for bank loans and boost consumption and investments.
In the policy rate setting-meeting of the central bank’s Monetary Board this month, however, it decided to maintain the key policy rates.