MANILA - The Philippine central bank does not expect inflation to reach 6 or even 7 percent, and is optimistic that it will ease after peaking either in August or September, its governor said on Thursday.
The central bank has raised rates by 100 basis points since May, including a last 50-bps hike on Aug. 9, and signaled it was open to further tightening to tame consumer price growth.
Annual inflation reached 5.7 percent in July, the highest in more than five years, as costlier fuel filtered into prices of consumer goods.
"We are not seeing 7 (percent). Based on our forecast we are not seeing 6 (percent). It might be close to the last one," Bangko Sentral ng Pilipinas Governor Nestor Espenilla told reporters, when asked about his inflation outlook for August and September.
"Our thinking is the peak will probably be hit in August or September before it starts coming down."
Most economists also expect inflation to peak during the third quarter, though some see it topping 6 percent and are flagging another 25 bps hike in the central bank's benchmark interest rate this year.
"Our job is to constantly monitor the environment (and) act when necessary. And because of that we have left the door open for further action in case we have to as more data come in," Espenilla said.
The rate hikes were not meant to "cripple the economy," he said.
"We are quite comfortable that moving interest rates in this calibrated fashion will not compromise economic growth."
The central bank raised rates last week on the same day that data showed that the Philippine economy, one of the fastest growing in Asia, grew at its slowest pace in three years in the second quarter.