The Bangko Sentral ng Pilipinas (BSP) on Friday sees inflation in August "to settle around 5.9 percent, with a range of 5.5-6.2 percent."

Inflation reached 5.7 percent in July.

In a statement by the BSP Department of Economic Research, the central bank said "the central forecast implies a slight deceleration of the month-on-month inflation."

"Higher price of rice and key food items due to weather disturbances and supply disruptions, increase in gasoline and LPG prices, and slight upward adjustment in electricity rates in Meralco-serviced areas contributed to upward price pressures in August," the BSP forecast said.

"Lower diesel and kerosene prices as well as modestly appreciated peso could partly temper price pressures this month," added the forecast.

The BSP has raised the overnight reverse repurchase rate three times by a total of one percentage point to four percent to rein in inflation.

The central bank said it "will remain watchful of economic and financial developments that could affect the inflation outlook and will closely monitor inflation expectations and emergence of further second-round effects ahead of the September 2018 Monetary Board policy meeting.” DMS