INFLATION could have eased further in July as lower food prices helped temper the impact of higher fuel and electricity costs, the Bangko Sentral ng Pilipinas (BSP) said on Friday.
“At a time of heightened uncertainty, the BSP projects July 2026 inflation to settle within the range of 5.6 to 6.6 percent,” the central bank said in its month-ahead inflation forecast.Consumer price growth has slowed in the last two months after surging to a three-year high of 7.2 percent in April. It settled at 6.4 percent in June but remained above the BSP’s 2.0- to 4.0-percent target.The BSP said upside price pressures last month likely came from elevated domestic petroleum pump prices, higher electricity rates, rising fish prices and a weaker peso.“These pressures are expected to be mitigated by lower prices of key food commodities, including rice, meat, vegetables and fruits,” it added.The Philippine Statistics Authority is scheduled to release official July inflation data on Aug. 5.The central said it would continue to monitor inflation and growth prospects as well as developments in the Middle East that could affect prices and economic activity.“The BSP will remain vigilant and guided by incoming data, particularly on inflation and growth prospects. It will continue to monitor recent developments in the Middle East for their impact on inflation and economic activity,” it said.The BSP earlier raised its average inflation forecast for 2026 to 6.4 percent from 6.3 percent and that for 2027 to 4.5 percent from 4.3 percent, citing the impact of higher global oil prices, peso depreciation and other inflation risks.Monetary authorities have raised key interest rates twice this year as inflation rose in the wake of the war in the Middle East, with renewed hostilities expected to again pressure prices. BSP Governor Eli Remolona Jr. has said the central bank remained prepared to tighten policy further should inflation risks intensify.The central bank’s next policy meeting is scheduled for Aug. 27.
