Economists see April inflation hitting 3.7%

Inflation likely picked up further in April as most economists polled by the Inquirer see the rate of increase in prices of basic goods exceeding or at least matching the 28-month high posted last March.

“Strong demand should have maintained the rise in headline inflation, reaching 3.7 percent year-on-year in April. Utility prices likely rose on the back of higher generation charges and increase in demand during the summer months. We also expect transport prices to have marginally risen with the rise in retail pump prices,” ANZ Research Asean economist Eugenia F. Victorino said.

The government will release April inflation data on Friday.

Headline inflation rose 3.4 percent year-on-year in March, the fastest since November 2014’s 3.7 percent. The inflation rate in April last year, meanwhile, was a low 1.1 percent.

The April inflation forecast of Euben Paracuelles, economist at Japanese financial giant Nomura, is 3.6 percent.

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, said he expected consumer prices to have had risen 3.5 percent year-on-year last month.

“Headline CPI (consumer price index) inflation is forecast to stabilize in April after having increased significantly during the fourth quarter of 2016 and the first quarter of 2017. The impact of higher utilities tariffs and retail petroleum prices are expected to be mitigated by some declines in the price of LPG,” Biswas said.

Inflation averaged 3.1 percent in the first quarter, a little past the midpoint of the government’s 2-4 percent target range for 2017.

Land Bank of the Philippines market economist Guian Angelo S. Dumalagan’s forecast for April was 3.4 percent, similar to the rate in March, “as the downward price pressure from the peso’s unexpected appreciation might have been offset by the general recovery in oil prices.”

After sliding to a more than 10-year low of 50.1 to $1 in mid-February, the peso returned to the 49:$1 level since April 10.

London-based economic research firm Capital Economics’ projection was also 3.4 percent.

For Ateneo de Manila University economics professor Alvin P. Ang, April inflation would be around 3.3 percent due to higher electricity prices.

“[Inflation] may be the highest already for the year in March unless significant problems in food supply happen,” Ang added. —BEN O. DE VERA