Inflation rose up from 1.6 percent to 1.8 percent in the month of June due to higher food prices, as reported by the DBS Bank Ltd. of Singapore.
The inflation forecast of DBS for the month of June would give enough room for monetary authorities to keep interest rates steady with it being slightly lower than the 2 to 4 percent projection of Bangko Sentral ng Pilipinas (BSP).
DBS economist Gundy Cahyadi said that the inflation was expected to tick up in the month as the effects of the low price of oil dissipates. Food prices also exhibited the same increase partly because of the weather, Cahyadi said.
BSP Governor Amando Tetangco Jr. earlier said in a report that the inflation for month of June would be between 1.5 to 2.4 percent due to increase in tuition and food prices.
The BSP’s monetary board has kept interest rates steady since October 2014 for 14 straight policy rate-setting meetings because of the strong demand and gentle inflation environment. The previous rate-setting meeting reduced the inflation forecast to 2 percent instead of the 2.1 percent due to the lower than expected minimum wage adjustment.
BSP Deputy Governor Diwa Guinigundo said that the country has enough buffers and strong macroeconomic fundamentals to weather global market situations in the US and of the recent ‘Brexit.’
The BSP is also expecting an P18 minimum wage adjustment in June for the next two years instead of the projected adjustment of P29.
