Bangko Sentral ng Pilipinas ( BSP) Deputy Governor Diwa Gunigundo on Saturday said inflation will reach its peak in September as the BSP's policymaking body meets next week to decide if policy rates must be increased.

“Inflation will remain high in September and based on our forecast September will be the highest peak then we will start to see lower inflation down the road,” Guinigundo said in a forum in Quezon City.

Inflation rate for August soared to nine-year high of 6.4 percent.

Policy rates have been increased by one percentage point since inflation began rising in the second quarter.

A 100 basis point (one percentage point) hike during the Monetary Board meeting on Sept. 27 needs "to be discussed," said Gunigundo.

"If we increase (rates by) 100 basis points, a few sectors will be happy with this but our economy may shrink," said Gunigundo.

Gunigundo said the BSP "will take stronger monetary policy action" against inflation.

President Rodrigo Duterte on Friday blamed the high inflation on oil prices.

“What's driving inflation now? Simply it's the price of oil. You will look around anywhere here. This microphone, this book, this glass of water, your suit, is connected with oil. Because they are made of machines and equipments. And those machines and equipment work only if there is oil, fuel. No oil, then you have to buy. Very expensive,” Duterte said in a speech in Lapu-Lapu City, Cebu.

“I admit there is an inflation. But it’s really--- the number one culprit is price of oil,” he added.

Guinigundo said the peso-dollar rate, which closed near 13-year lows last week, will improve once foreign remittances arrive this Christmas season.

Guinigundo said a stronger peso-dollar rate would help slow down inflation.

The BSP expects foreign remittances to increase by four percent this year, or about $29 to P30 billion compared to last year's $28 billion.

Guinigundo said they are projecting bigger revenues because of deployment of Philippine workers in new markets.

He said revenues from business process outsourcing (BPO) sector and tourist arrivals will also strengthen the peso-dollar rate. Ella Dionisio/DMS