Inflation further picked up and breached five percent in May on skyrocketing oil prices, elevated food prices, and the weak peso, according to the Bangko Sentral ng Pilipinas (BSP).
BSP Governor Benjamin Diokno said inflation settled within the range of five to 5.8 percent in May after accelerating to 4.9 percent in April from four percent in March.
“The continued increase in domestic petroleum prices, higher prices of key food items, and peso depreciation are the primary sources of inflationary pressures during the month,” Diokno said.
The outgoing BSP governor and incoming Finance Secretary said that rising inflationary pressures could be offset in part by lower electricity rates in Meralco-serviced areas, decline in LPG prices, and lower rice prices.
“Looking ahead, the BSP will continue to monitor closely emerging price developments to enable timely intervention to arrest emergence of further second-round effects, consistent with BSP’s mandate of price and financial stability,” Diokno added.
Inflation averaged 3.7 percent from January to April this year, still within the BSP’s two to four percent target range.
Due to rising inflationary pressures from the impact of the Russia-Ukraine war as well as the faster-than-anticipated gross domestic product (GDP) growth of 8.3 percent in the first quarter, the central bank’s Monetary Board started its interest rate liftoff by hiking key rates by 25 basis points last May 19.
The body also raised its inflation forecasts to 4.6 percent instead of 4.3 percent for 2022 and to 3.9 percent instead of 3.6 percent for 2023.