Volatile oil prices still pose an inflationary risk to the Philippines even though the consumer price index rise in July remained at the previous month's level, the central bank said Friday.
Inflation rose 4.6 percent from a year earlier in July due to lower upward increments for electricity, gas and other fuels, particularly liquefied petroleum gas, governor Amando Tetangco said in a statement.
That was the same pace as in June, when inflation was at a 26-month high, according to National Statistics Office data.
"The risks around the inflation outlook continue to lean toward the upside... as imported commodity prices are expected to remain volatile," Tetangco said. Oil is the Philippines' top commodity import.
The average inflation rate for the first seven months of the year was 4.3 percent, still within the 3-5 percent target range set for 2011, the central bank said.
On July 28, the central bank raised the reserve requirement of banks for the second time in two months in an effort to control inflation by cutting the volume of money in circulation.
The bank had then warned that a huge wave of foreign funds was flowing into the Philippines, which could potentially stoke inflation.