Pricey food seen to have offset cheaper fuel in Aug

Inflation in the Philippines is expected to remain high, but not higher, to register at 6.4 percent in August, according to ING Bank.

This would suggest a plateau since that would be the same rate recorded in July. It would also hike up the year-to-date average, with the Philippine Statistics Authority (PSA) putting this at 4.7 percent for January to July.

The PSA will announce the numbers on Sept. 6. So far, inflation has been rising month after month since 3 percent in February.

The Bangko Sentral ng Pilipinas (BSP) maintains a goal of shepherding annual average inflation within the range of 2 percent to 4 percent. But with recent developments, the central bank is resigned to miss the target this year, with the resulting number going above the upper end of the range.

ING Bank said the report on August inflation data will likely show the continuation of the year-long upward trend.

“August inflation in the Philippines will likely stay elevated given rising food prices and expensive energy,” the bank said.

“Transport fares are set to be adjusted higher, for the second time this year, which should ensure that inflation remains firmly on an upward trajectory in the coming months,” it added.

Last week, the BSP said inflation was expected to remain high in August and fall within the range of 5.9 percent to 6.7 percent.

The midpoint of this forecast range, 6.3 percent, suggests an improvement from 6.4 percent in July, although the upper range is higher.

“Inflation for [August] was driven by the continued increase in key food prices, but could be offset in part by the decline in global oil prices, the reduction in electricity rates, lower meat and fish prices, and appreciation of the peso,” the BSP said in a statement.

BSP Governor Felipe Medalla earlier said inflation is expected to remain high in the remainder of 2022, and could peak in October or November. INQ