June inflation likely picked up by as much as 1.9% on higher pump prices - BSP

Metro Manila, Philippines - The rise in consumer prices likely gathered pace to end June at a four-month high amid higher oil costs and a weaker peso, according to forecasts announced by the Bangko Sentral ng Pilipinas (BSP).

The central bank said it expects last month’s inflation to have settled within 1.1 percent and 1.9 percent. The upper end of that band, if realized, will be the fastest since February this year.

Inflation has cooled for the last four months to average at 1.9 percent so far this year, well below the central bank’s target of 3 percent, give or take a percentage point.

“Upward price pressures for the month are likely to be driven by higher meat and vegetable prices, elevated oil prices, and the depreciation of the peso,” the BSP said in a statement.

The nearly two-week airstrikes between Israel and Iran that ended with a US-brokered ceasefire on June 24 had pushed global oil prices to levels not seen since the Russia-Ukraine war, hurting domestic pump prices and Asian currencies, including the peso.

Higher import costs, exacerbated by a depreciating currency, prompted oil companies to jack up prices at the pump for three straight weeks.

The peso breached past P57-to-the-dollar as the Israel-Iran conflict roiled markets before returning to P56 to the greenback in wake of the truce.

“These pressures, however, could be partially offset by lower prices of rice, fish, and fruits, as well as lower electricity rates,” the BSP added.

The June inflation data will be out on Friday, July 4.

NewsWatch Plus Business News anchor Lois Calderon contributed to this story.