Inflation seen hitting 5.5 pct in August

MANILA, Philippines (Xinhua) - Inflation may climb to a five-year high of 5.5 percent in August due to higher food prices and power rates, the local central bank said today.

Bangko Sentral ng Pilipinas (BSP or Philippine central bank) Governor Amando Tetangco, Jr. said inflation in August could fall within the 4.7 percent to 5.5 percent range.

"The BSP forecasts incorporate the impact of reported increases in certain food products and in power rates due to weather-related supply and distribution constraints," Tetangco said.

Higher food prices and utility rates caused inflation in July to spike to a 33-month high of 4.9 percent, bringing the January to July average to 4.3 percent. The Philippine government is targeting keeping inflation within the 3 percent to 5 percent range this year.

Tetangco said the BSP is ready to make necessary adjustments to keep inflation within the government's target. The Monetary Board will revisit policy settings on Sept. 11.

Last month, monetary authorities raised key policy rates to safeguard inflation targets for 2014 and 2015.