UNFAVORABLE base effects and lingering upside risks will continue to push inflation up in the coming months, analysts said, with the peak likely to be hit in July.
Consumer price growth rose for a fourth straight month in May to 3.9 percent, from April's 3.7 percent, due to rising housing, power and utility costs. It was lower, however, than the 4.0 percent expected by economists.'We think the upward momentum may persist in the next two months given unfavorable base effects, weaker peso and lingering food supply issues,' Bank of the Philippine Islands senior economist Emilio Neri said in a note.Food inflation has already slowed to 6.
'These measures could result in a lower inflation path than previously projected and help ensure full-year inflation settles firmly within the BSP's target,' it said.Improving inflation, Chinabank Research said, could give the Bangko Sentral ng Pilipinas enough reason to cut rates sooner despite the attendant risks.
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