Economists see 0.9 to 1% inflation in September

Economists see inflation further easing in September despite an increase in fuel prices following an attack on Saudi oil facilities.

Twelve of 13 economists polled by Inquirer last week projected lower rate of price increases in September compared to August. The government would release September inflation data on Oct. 4, Friday.

The lowest forecast was 0.9-percent headline inflation this month, which Thatchinamoorthy Krshnan of Oxford Economics attributed to “strong base effects from food inflation.”

Four economists—Ateneo de Manila University’s Alvin P. Ang, Capital Economics’ Alex Holmes, Rizal Commercial Banking Corp.’s Michael Ricafort, and Security Bank’s Robert Dan J. Roces—projected 1 percent year-on-year.

Ang said increases in fuel prices were balanced out by lower electricity rates while an increase in chicken prices was offset by a decline in pork prices as a result of the African swine fever scare.

Holmes said local food costs and global oil prices spiked in 2018 so these were still higher than their levels in September 2019.

Roces said he does not see a repeat of inflation going berserk like it did in 2018 as a result of fuel prices “as production levels are slowly normalizing in Saudi Arabia,” the world’s largest oil producer.

Ricafort attributed easing inflation partly to rice importation.

ANZ Research’s Mustafa Arif, ING Bank Manila’s Nicholas Antonio T. Mapa, and Nomura’s Euben Paracuelles had the same forecast of 1.1.-percent September inflation.

HSBC’s Noelan Arbis as well as University of Asia and the Pacific’s Victor A. Abola projected 1.3 percent, as the UA&P professor noted only “minor increases in (prices of) food and other items” during the month.

BDO Unibank Inc. chief market strategist Jonathan L. Ravelas and University of the Philippines-Los Baños College of Economics and Management Dean Agham C. Cuevas also see slower September inflation at 1.4 percent and 1.5 percent, respectively, even as Katrina Ell of Moody’s Analytics gave the highest forecast of 1.9 percent year-on-year “on the back of higher global oil prices flowing through to the consumer.” /TSB