April inflation seen at 1.3%

ECONOMISTS expected inflation to have risen slightly faster in April than a month ago’s 1.1 percent on higher prices of food, oil and utilities.

In an economic bulletin last week, Finance Undersecretary Gil Beltran said inflation likely inched up to 1.3 percent year-on-year last month, although still slower than the 2.2 percent posted in the same month last year.

On a year-on-year basis, “the low price change is traced to comparatively lower electricity and fuel prices and moderate food price increase,” Beltran said, citing that power and diesel prices last month were down 17 percent and 36 percent, respectively, from a year ago.

“Price stability will continue to give policymakers room to maneuver in addressing macroeconomic volatilities,” said Beltran, the Department of Finance’s chief economist.

Metrobank Research’s Pauline May Ann E. Revillas, who shared the same forecast as Beltran, attributed the faster pace to “a broad increase in the prices of food and petroleum products.”

Standard Chartered Banks Jeff Ng and Natixis’ Trinh D. Nguyen said their projection for April inflation was 1.2 percent as Nguyen also noted a month-on-month increase in prices of electricity, oil and water.

Last week, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said inflation was likely within the 0.7-1.5 percent range in April.

In February, the BSP cut its 2016 inflation forecast to 2.2 percent from 2.4 percent previously as downward pressures outweighed upside risks. Inflation settled at an average 1.4 percent in 2015, the lowest annual rate in almost two decades.

First Metro Investment Corp. last week said it saw inflation remaining at the lower end of the government’s 2-4 percent target in 2016 “especially with oil prices expected to remain soft until 2017.”

ING Bank Manila’s Joey Cuyegkeng also last week said they expected inflation “to trend higher to average at 1.8 percent in 2016 and around 3 percent in 2017.”