By Pilar Manuel, May 31, 2022; CNN Philippines

Metro Manila (CNN Philippines, May 31) — The Bangko Sentral ng Pilipinas expects inflation to further heat up in May, settling within 5-5.8% during the month.

“The continued increase in domestic petroleum prices, higher prices of key food items, and peso depreciation are the primary sources of inflationary pressures during the month,” the BSP said Tuesday.

The projected range outpaces the 4.9% rate in April and the central bank’s full-year target band of 2-4%.

“These could be offset in part by lower electricity rates in Meralco-serviced areas, decline in LPG prices, and lower rice prices,” the BSP further stated.

The Monetary Board raised interest rates by 25 basis points to 2.25% in May, formally starting its hiking cycle in a bid to stomp surging inflation. Central bank governor Benjamin Diokno has already hinted another 25-bps hike could be implemented this June.

The Development Budget Coordination Committee has likewise bumped up its inflation target band for 2022 to 3.7-4.7% from the prior 2-4%, citing the increase in food and energy prices due to the Ukraine-Russia conflict and disrupted supply chains.