After June's dip, rising energy, food prices will likely push July inflation up, BSP warns

After breaking a four-month uptrend last month, the central bank said on Wednesday that it expects prices of basic goods and commodities to have risen faster in July, no thanks to higher energy and food costs.

In a statement, the Bangko Sentral ng Pilipinas (BSP) said it projects July 2024 inflation to increase to a range of 4.0% to 4.8%.

This range is higher than the official government inflation rate of 3.7% recorded in the previous month — the first decline recorded after four successive months of higher consumer price indices since the start of the year.

It is also higher than the central bank’s prediction of a 3.4-4.2% inflation rate for the previous month.

The central bank attributes this rise to higher electricity rates and increased prices for agricultural commodities such as vegetables, meat, and fruits, alongside rising domestic oil prices.

These inflationary pressures are expected to be partially mitigated by lower prices for rice and some fruits, as well as the appreciation of the peso.

The BSP said it remains vigilant in monitoring inflationary trends and their impact on economic growth, maintaining a data-driven approach to monetary policy formulation.

The Philippine Statistics Authority is scheduled to announce the official inflation rate for July on the morning of August 6, Tuesday.