Economists see June inflation at below 3%

Inflation likely fell below 3 percent in June—which will be the first time in one-and-a-half years, reversing the uptick to 3.2 percent in May.

Of the 13 economists polled by the Inquirer last week, only Moody’s Analytics economist Katrina Ell projected the rate of increase in prices of basic commodities last month at 3 percent year-on-year, which was also lower than the previous month’s figure, which she attributed to “cooler” rice prices.

Twelve economists expect headline inflation in June to have settled between 2.6 percent and 2.9 percent.

The last time the monthly rate was below 3 percent was in December 2018, at 2.9 percent.

The government will release the June inflation data on Friday, July 5.

Bank of the Philippine Islands vice president and chief economist Emilio S. Neri Jr. and Rizal Commercial Banking Corp.’s Michael L. Ricafort shared the lowest forecast of 2.6 percent.

Neri noted of a month-on-month price decline in most items, especially food, in the consumer price index (CPI) basket, as well as base effects—to recall, it was in June last year when the headline rate breached the 5-percent level amid higher excise slapped on consumption, elevated global prices and domestic food supply bottlenecks, especially of rice.

For his part, Ricafort attributed his forecast to lower global oil prices and a stronger peso which offset the impact of the prolonged dry spell due to El Niño on some agricultural products.

Capital Economics Asia economist Alex Holmes projected 2.7-percent inflation last month as “both fuel and rice price inflation continued to moderate.”

The forecast of 2.8 percent was shared by ANZ Bank’s Sanjay Mathur, HSBC economist for Asean Noelan Arbis, and University of Asia and the Pacific economics professor Victor A. Abola.

Mathur and Arbis both noted that education costs likely picked up as June marked the start of classes for most schools, while Abola also pointed to slightly lower electricity rates that month.

Six economists—Ateneo de Manila University economics professor Alvin P. Ang, Barclays’ Angela Hsieh, ING Bank Manila senior economist Nicholas Antonio T. Mapa, Nomura economist Euben Paracuelles, Security Bank Corp. assistant vice president and economist Robert Dan J. Roces, and University of the Philippines-Los Baños’ Agham Cuevas—see the June inflation rate at 2.9 percent.