Poll: Flat consumer demand likely restrained July inflation at 2.5%
Inflation in July likely matched the 2.5-percent year-on-year increase recorded in June while consumer demand remained tepid even with more relaxed quarantine measures against COVID-19.Of the 10 economists who responded to the Inquirer’s poll last week, seven projected the rate of increase in prices of basic goods at 2.5 percent. The Philippine Statistics Authority will release its inflation report for the month of July on Wednesday, Aug. 5.The seven economists who shared the same July inflation forecast of 2.5 percent were Ateneo de Manila University’s Alvin Ang, Banco de Oro Unibank’s Jonathan Ravelas, Barclays’ Angela Hsieh, HSBC’s Noelan Arbis, Rizal Commercial Banking Corp.’s Michael Ricafort, Security Bank’s Robert Dan Roces and UnionBank of the Philippines’ Ruben Carlo Asuncion.Ang said inflation last month remained “benign” while Arbis noted that “global oil prices have been stable from the previous month, likely leading to no significant changes in transportation costs.”But for Ricafort, “limited/lack of public transportation as the local economy further reopened [led to] some increase in transportation costs especially for the masses/general public amid the lack of cheaper mass/public transport systems.” Jeepney and bus routes were still limited that month, forcing people to take the more expensive modes of transportation.
Back in June, higher transport costs pushed headline inflation to a three-month high as commuters struggled to go to work given limited public transportation options. About 75 percent of the economy resumed under a less-restrictive general community quarantine but with minimum health standards still in place.“Price pressures generally remain subdued with modified lockdowns still in place in most urban centers, including a tougher community quarantine in Cebu City. This, plus higher unemployment levels, may be limiting demand for other commodities and keeping price pressures in check,” Roces, for his part, said.For Asuncion, “consumption demand, due to the continuing impact of the COVID-19 pandemic, is anticipated to remain timid.” —BEN O. DE VERA INQ
