After easing in March, inflation seen to rise anew
Inflation likely picked up again in April as progress made in easing food prices had been offset by the more stringent quarantine measures imposed in areas accounting for half of the economy, economists said.
Of the 17 economists polled by the Inquirer, 13 projected the rate of increase in the prices of basic commodities to be higher than the 4.5-percent posted in March.
The Philippine Statistics Authority (PSA) will release April inflation report on Wednesday, May 5.
London-based Capital Economics had the highest forecast of 5.2 percent, while Bank of the Philippine Islands’ Emilio Neri Jr. and Philippine National Bank’s Alvin Joseph Arogo shared the same estimate of 4.9 percent.
Arogo attributed his projection to “the lifting of the pork price cap in the National Capital Region (NCR), higher oil prices, and impact of stricter quarantine measures” in so-called NCR Plus, which covered Metro Manila as well as the provinces of Bulacan, Cavite, Laguna and Rizal.
These areas reverted to two weeks of the strictest enhanced community quarantine (ECQ) before March ended and then back to the less stringent modified enhanced community quarantine (MECQ) for the rest of April until mid-May.
High food prices, power cost
Neri said headline inflation remained elevated due to higher prices of fish, meat, and rice, compounded by higher power costs.
“We think the impact of the ECQ and MECQ was not as disruptive on supply chains as the last time we had it in July 2020 as delivery of basic goods appeared to have moved more freely compared to prior restrictions,” Neri said.
BDO Unibank’s Jonathan Ravelas, HSBC Global Research, and Pantheon Macroeconomics’ Miguel Chanco projected April inflation to hit 4.8 percent.
ING’s Nicholas Antonio Mapa, Nomura’s Euben Paracuelles and Security Bank’s Robert Dan Roces believed last month’s inflation stood at 4.7 percent.
2 expect lower rate
ANZ’s Sanjay Mathur, Barclays’ Angela Hsieh, UnionBank’s Ruben Carlo Asuncion, and University of Asia and the Pacific’s Victor Abola expect inflation rate to have inched up to 4.6 percent last month.
Rizal Commercial Banking Corp.’s Michael Ricafort and Sun Life Financial’s Patrick Ella projected the April rate to be the same as March’s 4.5 percent.
Two economists see a lower inflation rate in April compared to March: Citi’s Nalin Chutchotitham’s forecast is 4.4 percent, while Moody’s Analytics’ Steven Cochrane expects it at 4.2 percent.
“Reduction in pork import tariff would likely help to ease meat prices slightly despite the ongoing supply tightness. Electricity prices rose only slightly and transport prices would have likely changed little from March,” Chutchotitham said.
“The quarantine measures in greater Metro Manila do create logistical barriers that may have kept prices from falling further in April, hence our expectation is only for a moderate improvement in the CPI [consumer price index],” Cochrane, for his part, said.
—Ben O. de Vera INQ
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