The Bangko Sentral ng Pilipinas (BSP) forecasts inflation for the month of August could hit a high of 6.7 percent or a low of 5.9 percent from actual rate of 6.4 percent in July.

The BSP said on Wednesday, Aug. 31, that price pressures emanating from continued high food prices could still push inflation higher than July’s consumer price index. The government will announce the August inflation on Sept. 6.

“Inflation for the month was driven by the continued increase in key food prices, but could be offset in part by the decline in global oil prices, the reduction in electricity rates, lower meat and fish prices, and appreciation of the peso,” according to the BSP.

The central bank said it will continue to monitor closely emerging price developments “to enable timely intervention that could prevent further broadening of price pressures, consistent with BSP’s mandate of price stability conducive to sustainable economic growth.”

BSP Governor Felipe M. Medalla has said that inflation will likely peak in September or October this year. Headline inflation year-to-date is at 4.7 percent average as of end-July.

Medalla said inflation will remain on the high side, or above the target of two percent to four percent, until the first half of 2023.

The BSP’s Monetary Board last Aug. 18 raised the policy rate anew by 50 basis points (bps) to 3.75 percent to temper inflation pressures and tame exchange rate volatility.

The BSP has also revised its 2022 inflation forecast higher to 5.4 percent from five percent previously. For 2023 and 2024, the BSP lowered forecasts to four percent and 3.2 percent versus earlier estimates of 4.2 percent and 3.3 percent, respectively.

Medalla said they expect inflation to be closer to three percent in the second half of 2023.

So far, the BSP has raised the policy rate by 175 bps since May this year to ensure inflation expectations remain firmly anchored to the BSP’s inflation outlook.