Economists see April inflation at 2.8 to 3.2%

Inflation likely further eased in April, with a possibility of falling below the 3-percent level for the first time since December 2017.

Of the nine economists polled by the Inquirer, Rizal Commercial Banking Corp.’s Michael Ricafort had the lowest forecast of 2.8 percent year-on-year.

The last time the monthly headline inflation was at the 2-percent level was in December 2017, at 2.9 percent.

“Inflation would likely continue to ease in April as well as in the coming months of 2019, largely driven by lower food prices (which account for 35 percent of the inflation/consumer price index basket), especially rice prices (which is about 10 percent of the inflation/CPI basket) more than offsetting any uptick in food/agriculture prices due to the expected mild El Niño dry spell that could last up to August, upward adjustment in electricity prices and the increase in global oil prices at six-month highs recently (but already eased to one-month lows recently),” Ricafort said.

The government will release the April inflation figure on Tuesday, May 7.

Two economists projected the rate of increase in prices of basic commodities last month at 2.9 percent.

“We expect inflation dropped below the midpoint of the central bank’s target for the first time since August 2017. While transport price inflation is likely to have picked up on the back of higher global oil prices, falling rice prices are likely to have continued to pull down food price inflation,” Capital Economics Asia economist Alex Holmes said.

“Our inflation call for April is 2.9 percent, factoring in lag effects from improved supply-side conditions for food items. Higher oil prices and El Niño may have lag effects and could probably manifest by May print,” Security Bank assistant vice president and economist Robert Dan Roces said.

The majority of these economists expect inflation still at 3 percent or above in April—it was 3 percent for Maybank Investment Bank group chief economist Suhaimi Bin Ilias, and 3.1 percent for Ateneo de Manila University economics professor Alvin Ang, IHS Markit Asia-Pacific chief economist Rajiv Biswas and Nomura economist Euben Paracuelles.

Bank of the Philippine Islands vice president and chief economist Emilio Neri Jr. and DBS Bank Ltd. economist Masyita Crystallin shared the highest end of economists’ projections, at 3.2 percent.

With the inflation rate slowing down, most economists believe the Bangko Sentral ng Pilipinas will cut interest rates when its policymaking Monetary Board meets to discuss the monetary policy stance on May 9.

In the first quarter, inflation averaged 3.8 percent, already within the Cabinet-level Development Budget Coordination Committee’s 3-4 percent target range.