The BSP Department of Economic Research projects inflation in August 2018 to settle at around 5.9 percent, with a range of 5.5 – 6.2 percent. 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. Meanwhile, lower diesel and kerosene prices as well as modestly appreciated peso could partly temper price pressures this month. The BSP 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.