Inflation momentum likely slowed in Aug
Inflation’s seven-month rise will likely show signs of slowing even as it appears to have hit a new nine-year high in August, the Finance department said on Monday.
“The inflationary momentum is easing as shown by the forecast deceleration in the month-on-month price change to 0.38 percent from 0.51 percent last month, even as the year-on-year change is projected to hit 5.9 percent,” it said in an economic bulletin issued ahead of Wednesday’s release of official inflation data.
Consumer price growth, which was just 2.4 percent in August last year, has been on the rise since the start of 2018, topping the 2.0-4.0 percent target since March 2018 and hitting 5.7 percent in July — a nine-year high based on updated Philippine Statistics Authority (PSA) data.
The Bangko Sentral ng Pilipinas has a 5.5-6.2 percent forecast for the month and analysts polled by The Manila Times have offered projections ranging from 5.8-6.1 percent.
“The driver of inflation is largely supply-side challenges which need to be addressed by improving productivity,” the Finance department said.
“In the immediate to medium-term horizon, the country needs to enhance food security by taking advantage of international trade,” it added, noting ongoing moves to lift quantitative restrictions on rice, which accounts for 9.6 percent of the consumer price index basket.
Expected price upticks for August are for food and non-alcoholic beverages (7.48 percent from 7.03 percent); alcoholic beverages and tobacco (22.14 percent from 21.51 percent); clothing and footwear (2.48 percent from 2.44); furnishings, household equipment (3.55 percent from 3.28 percent); health (3.97 percent from 3.73 percent); recreation and culture (1.00 percent from 0.90 percent); and restaurants and miscellaneous services (3.98 percent from 3.75 percent).
The price of diesel rose to P58.55 per liter from P57.53 in Metro Manila while gasoline prices increased to P46.80 per liter from P46.62.
Manila Electric Co.’s per kilowatt-hour rate for households consuming 200 kWh per month, meanwhile, increased to P10.22 in August from P10.19 a month ago.
Economic managers earlier raised this year’s inflation forecast to 4.0-4.5 percent from 2.0-4.0 percent, higher than the BSP’s 2.0-4.0 percent goal, in recognition of latest developments.
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