MANILA - The Bangko Sentral ng Pilipinas sees inflation slowing in August back to within the government's target range. 

In its Month-Ahead Inflation Forecast, the BSP said it expects inflation to settle within the range of 3.2 to 4.0 percent. This was slower than the 4.4 percent clip in July.

"Higher electricity rates and higher prices for agricultural commodities, owing to unfavorable weather conditions, are the primary sources of upward price pressures for the month. These factors are expected to be offset by lower domestic oil prices as well as lower rice, fish, and meat prices along with the peso appreciation," the central bank said. 

BSP Governor Eli Remolona earlier said that while inflation quickened to 4.4 percent in July as power and fuel costs increased, headline inflation is projected to trend downward to within the government's 2 to 4 percent target range. 

Remolona said they expect the reduction of import tariffs on rice to help slow down inflation. 

The slower inflation outlook was one of the reasons cited by the central bank for cutting interest rates by 25 basis points earlier this month.

Remolona has said that another 25 bps cut is possible this year.  

"Going forward, the Monetary Board will continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment," the BSP said.