Oct inflation seen slowing to 4.3-4.7%

Most economists watching the Philippines expect a further slowdown in—but still above-target—headline inflation in October as food price hikes ease, while expensive oil poses upside risks to consumer prices moving forward.

Out of the 19 October inflation forecasts collected by the Inquirer last week, 10 projected the rate of increase in prices of basic commodities to have eased to 4.3 to 4.7 percent or lower than September’s 4.8 percent. The Philippine Statistics Authority (PSA) will release its October inflation report on Nov. 5.

London-based Capital Economics had the lowest forecast of 4.3 percent year-on-year, although it was higher than the government’s 2 to 4 percent target range of manageable price increases conducive to economic growth and recovery.

Ateneo de Manila University’s Ser Percival Peña-Reyes, Goldman Sachs Economics Research, Oxford Economics’ Makoto Tsuchiya and Philippine National Bank’s Alvin Joseph Arogo shared the same projection of 4.6 percent.

Barclays’ Shreya Sodhani, BDO Unibank’s Jonathan Ravelas, Citi’s Nalin Chutchotitham, Standard Chartered’s Jonathan Koh, and UnionBank’s Ruben Carlo Asuncion forecasted 4.7 percent.

Supply snags

HSBC Global Research estimated October inflation at 4.8 percent, the same as September’s rate; Security Bank’s Robert Dan Roces projected a higher 4.9 percent as “food remains elevated and remains susceptible to any supply snags, such as a delay in meat imports.”

The rest of the forecasts were above 5 percent—a rate last seen in December 2018 at 5.1 percent amid then expensive rice.

ANZ’s Sanjay Mathur, ING’s Nicholas Antonio Mapa, Moody’s Analytics’ Sonia Zhu, Rizal Commercial Banking Corp.’s Michael Ricafort, and Sun Life Financial’s Patrick Ella projected 5 percent in October, while University of Asia and the Pacific’s Victor Abola expected a 5.1-percent print.

Pantheon Macroeconomics’ Miguel Chanco had the highest projection of 5.3 percent year-on-year inflation rate last month. INQ