MANILA -- Inflation quickened for the seventh straight month in July, holding at its highest level in 5 years, as the government sought to temper rising consumer prices.
The consumer price index rose 5.7 percent, higher than the median 5.5 percent based on a Reuters poll of economists. Inflation was at 5.2 percent in June.
Prices of food and non-alcoholic beverages rose 7.1 percent in July. Faster inflation was recorded in 9 out of 11 commodity groups. Rice inflation was at 5 percent from 4.7 percent in June, data from the Philippine Statistics Authority showed.
Inflation in the National Capital Region was at 6.5 percent from 5.8 percent in the previous month and 2.9 percent in July 2017.
Outside the NCR, inflation was at 5.5 percent in July, compared to 5.1 percent in June and 2.2 percent in July 2017.
President Rodrigo Duterte last month asked Congress to pass a law that will tax imported rice in place of import quotas as part of measures to contain inflation.
The price spikes puts pressure on the Bangko Sentral ng Pilipinas to raise its benchmark rate for the third straight time this year when it meets this week, analysts said. Its think tank had predicted July inflation at 5.2 to 5.7 percent.
The Bangko Sentral needs a "strong response," with a 50-point rate hike and a strongly worded statement during its policy meeting on Thursday, BPI lead economist Jun Neri said.
Inflation could be "very close" to 6 percent in September, before falling below the BSP's 4-percent ceiling in the third quarter of 2019, Neri said.
Monetary authorities need to determine if the demand side is driving inflation, said BPI Asset Management and Trust Corp CIO Smith Chua. A 50-point hike on Thursday is "just right for now," he said.