MANILA: Consumer prices may have climbed at a quicker clip in August, pushed up by higher electricity and transport costs and a spike in vegetable prices after monsoon rains battered crops.
Inflation, as measured by the consumer price index (CPI), likely sped up to 1.2%, according to the median estimate of 15 economists polled by the Inquirer last week.
This suggests that the official figure, due Sept 5 from the Philippine Statistics Authority, would be up from July’s 0.9% increase and in line with the Bangko Sentral ng Pilipinas’ (BSP) forecast of between 1% and 1.8%.
Even with the pickup, inflation is still expected to undershoot the BSP’s 2% to 4% target range for a sixth straight month – a stretch of subdued price gains that could shape the central bank’s next policy moves.
“Accelerating food prices due to disruptive weather and higher energy costs will be the likely culprits for the increase,” economists at Metrobank said, pencilling in a 1.3% CPI for August.
Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines, said a weak currency that flirted with the 56 peso to 57 peso levels against the US dollar last month may have added import costs.
But Asuncion said easing rice prices, a staple for Filipino households, and an influx of cheaper Chinese goods seeking to avoid US tariffs may have tempered price pressures. His forecast of 1.2% matched the consensus.
Sarah Tan, an economist at Moody’s Analytics, pointed to “several risks”, including weather disturbances that could hit crop output and reverse recent declines in food inflation.
The August CPI will be reported a week after the BSP slashed the overnight borrowing rate by a quarter point to 5%.
It was a level that governor Eli Remolona Jr described as the “Goldilocks”, neither inflationary nor restrictive to economic growth. — Philippine Daily Inquirer/ANN
