PH inflation seen slightly up in May

Posted at 06/03/2014 4:17 PM | Updated as of 06/03/2014 4:17 PM

MANILA - Philippine inflation may have picked up slightly in May on higher food and utilities costs, but the central bank is still widely expected to keep its key interest rate unchanged after growth slowed unexpectedly in the first quarter.

Annual headline inflation likely edged up to 4.2 percent last month, from 4.1 percent in April, according to a consensus forecast of 15 analysts in a Reuters poll.

The median estimate for May inflation is near the lower end of the central bank's 3.9 to 4.7 percent forecast for that month. May inflation data is due on June 5.

The central bank targets inflation to average anywhere between 3 to 5 percent this year.

Despite the slight pick-up in price pressures, some analysts expect the central bank to delay key rate increases after the economy unexpectedly grew at its slowest pace in two years of 5.7 percent in the first quarter.

The central bank kept the benchmark rate steady at a record low 3.5 percent on May 8 but raised banks' reserve requirements for the second straight meeting, as expected, amid concerns that persistently high liquidity could stoke inflation. Its next monetary policy review is on June 19.