BSP Projects Slower Inflation for August

The Bangko Sentral ng Pilipinas (BSP) forecasts a slowdown in inflation for August, expecting it to fall between 3.2% and 4%, compared to July’s prediction with an inflation rate of 4.4%.

The BSP attributes this anticipated drop to lower domestic oil prices and reduced costs for rice, fish, and meat. Additionally, a stronger peso is expected to contribute to this easing.

These factors are projected to counteract the impact of rising electricity rates and increased prices for some agricultural goods due to recent weather conditions.

Inflation had previously exceeded the government’s target range of 2% to 4% in July, prompting the BSP to cut interest rates by 25 basis points earlier this month.

The rate reduction aims to support economic growth and employment while maintaining price stability.

The official inflation data for August will be released by the Philippine Statistics Authority (PSA) on September 5. If the forecast proves accurate, it would support the BSP’s recent decision to lower borrowing costs, a move intended to ease the financial burden on consumers and stimulate the economy.

Looking ahead, the BSP plans to continue its cautious approach in managing monetary policy to balance economic growth with price stability. Another rate cut may be considered later this year, depending on future economic conditions and inflation trends. (ASC)