Higher electricity rates, increased vegetable prices, and recent peso depreciation are the main contributors to this upward trend, the central bank said in a statement.
However, lower prices for rice, fish, fruits, domestic oil, and LPG may help offset these pressures, it explained.
This higher forecast range is in line with the statement made earlier this week by BSP Senior Assistant Governor Iluminada Sicat that the market should expect an uptick in the inflation rate from May to July before returning to upper end of the government’s forecast range toward the end of 2024.
Inflation — which represents the pace of price increases for basic goods and services — erodes the purchasing power of the peso, and if commonly addressed by raising interest rates or eliminating supply bottlenecks in the economy.
The BSP said remains vigilant, monitoring developments that impact inflation and growth to guide its data-dependent monetary policy decisions.
The government will release the official inflation rate for May on June 6, Thursday.
