The central bank announced on Friday that the annual inflation rate in the Philippines for September is predicted to fall between 5.3% and 6.1%. This announcement was made before the release of official data next week.
The Bangko Sentral ng Pilipinas (BSP) stated that increased costs of fuel, electricity, and important agricultural products, along with the weakening of the peso, were the main factors contributing to rising prices in September.
The statement mentioned that decreasing the costs of rice and meat could potentially lead to a decrease in overall prices for the month.
The rate of inflation in August increased for the first time in seven months to 5.3%, mainly due to higher prices for food and transportation. This puts pressure on the central bank to continue their strict approach to monetary policy.
BSP Governor Eli M. Remolona reaffirmed his hawkish stance on Thursday, mentioning the possibility of an off-cycle interest rate increase if the numbers warrant it.
He stated that the BSP’s rate-setting meeting in November would potentially include a hike.
On September 21, the BSP maintained its Target Reverse Repurchase Rate at 6.25% for the fourth consecutive meeting. This decision follows a string of increases from May of last year until March of this year in an effort to control inflationary pressures.
The BSP stated on Friday that it will continue to observe changes that may impact the inflation and growth forecasts, following its data-driven approach to formulating monetary policies.