Private economists see higher November inflation

The string of strong typhoons, which not only left billions of pesos in damage but also pushed prices of agricultural and food items higher, likely jacked up inflation in November, according to the majority of economists polled by the Inquirer last week.

Seven out of the 12 economic research and financial institutions projected the rate of increase in prices of basic commodities this monrh above the three-month high of 2.5 percent recorded in October.

The Philippine Statistics Authority (PSA) will release its November inflation report on Friday, Dec. 4.

UnionBank’s Ruben Carlo Asuncion had the highest forecast of 3 percent year-on-year, as he projected “the typhoon-induced food price upticks, particularly in the Luzon area, can augment the monthly headline inflation by 0.5 percentage point (ppt).”

“We have derived this estimate from historical data analysis of a mix of the country’s costliest typhoons from 2009 to 2018 and particular regional monthly food inflation of rice, fish, fruits and vegetables. These commodities combine to about 19.3 percent of the total inflation basket,” Asuncion explained.

Also, Asuncion said the price upticks could spill over until December as the typhoons were spread out in November.

Five economists projected 2.7-percent inflation for the month: Barclays’ Angela Hsieh, ING’s Nicholas Antonio Mapa, Rizal Commercial Banking Corp.’s Michael Ricafort, Security Bank’s Robert Dan Roces and Sun Life Financial’s Patrick Ella.

Mapa and Roces noted that pork prices stayed elevated due to the African swine flu scare, while Ricafort and Roces also pointed to higher global oil prices.

Banco De Oro Unibank’s Jonathan Ravelas had a forecast of 2.6 percent year-on-year, while three economists see the same rate of 2.5 percent as in October: HSBC’s Noelan Arbis, Moody’s Analytics’ Denise Cheok and Morgan Stanley Research.

Two forecasts were below October’s rate: ANZ’s Sanjay Mathur (2.4 percent) and Capital Economics’ Gareth Leather (2.3 percent).

“I do recognize the string of typhoons but the weak [economic] growth means that core inflation is likely to have remained subdued,” Mathur said.

The worse-than-expected 11.5-percent year-on-year drop in gross domestic product during the third quarter had been partly blamed on still weak consumer demand while the country remained in prolonged but nonetheless gradually easing COVID-19 quarantine. —Ben O. de Vera INQ