BSP: JUNE INFLATION MAY REACH 4.2%; BUSINESSES LESS OPTIMISTIC

BSP survey firms less optimistic and inflation for the month of June may settle to 4.2%(Photo courtesy of GMA News)

Businessmen's confidence in the country's economy in the second quarter of the year, decreased based on a survey by the Bangko Sentral ng Pilipinas (BSP). 

Based on the BSP's 2024 Business Expectation Survey this second quarter of the year, the business expectation index dropped to 32.1% from 33.1% in the first quarter of the year. Among the visible reasons for this is the sluggish demand for goods and services.

The international conflict continues resulting in an increase in the price of oil, a slowdown in business activity due to the effect of El Niño and high inflation which in turn affects consumer consumption.

“Businesses in the Philippines turned less optimistic for the third quarter and the next 12 months as firms expect lower sales due to weaker demand, higher inflation and the adverse impact of geopolitical tensions abroad,” the BSP said.

The central bank also added that this month, the government's ceiling on price increases for consumer goods and services may have been breached as the inflation for June is expected to range between 3.4 percent to 4.2 percent. 

“Increases in the prices of agricultural commodities like rice, vegetables, meat, and fish, along with the peso depreciation and higher domestic oil prices, are the primary sources of upward price pressures for the month. Meanwhile, lower electricity rates and fruit prices could contribute to the deceleration in inflation,” the BSP stated. 

“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy formulation,” it added.

Following a gradual decrease to 2.8 percent at the beginning of the year, high prices for food, gasoline, and electricity caused inflation to spike to 3.4 percent in February, 3.7 percent in March, 3.8 percent in April, and 3.9 percent in May.

Source: ABS-CBN News

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