April inflation seen at 7%
MANILA -Private-sector economists expect April inflation in the Philippines to be higher than the forecast of the Bangko Sentral ng Pilipinas (BSP), firming up the view that the pace of rising prices continues to be a major concern through this year.
The Philippine Statistics Authority (PSA) will announce the official readout Friday, May 5.
Pantheon Macroeconomics agrees with the analysts’ consensus of a 7-percent readout in April.
“A big drop in food and transport inflation should again be the main reason behind the headline fall,” according to the research firm which is based in the United Kingdom.
ING Bank, meanwhile, penciled in 6.9 percent for April, which the Dutch group said could open the door for the BSP to consider in their policy meeting later this month to stop raising interest rates.
Goldman Sachs forecasts 6.8 percent, citing lower electricity costs and lower prices of some food items.
Upper band
Security Bank Corp. agrees, noting in particular the lower prices of liquefied petroleum gas, fish and vegetables.
These forecasts, however, are higher than the BSP’s 6.7 percent. However, with a forecasting margin of 0.4 percentage point both ways, the analysts forecasts are within the upper band of the BSP’s 6.3 percent to 7.1 percent.
Jonathan Ravelas, managing director of eManagement for Business and Marketing Services, is forecasting a higher 7.3 percent.
BMI, a subsidiary of Fitch Solutions, expects inflation to average at 6.5 percent this year—higher than 5.8 percent in 2022—but the company also sees the monthly readout easing to 4 percent by December.
“The risk now is that inflation remains elevated at these levels for longer than anticipated, which will accelerate the erosion of household purchasing power,” BMI said.
The research firm added that while the rate of price changes is slowing, this remains higher than central banks’ targets and higher than what consumers have grown accustomed to, especially over the past decade.
In the Philippines, inflation has slowed down for the second month in a row at 7.6 percent in March. The government’s economic team expects the full-year average to fall within 5 percent to 7 percent—meaning a forecast of 6 percent.
“Although this (the March readout) is the lowest recorded inflation figure since (6.9 percent in) September 2022, it is still one of the highest levels of inflationary spikes since the global financial crisis in 2008 as prices for household goods, clothing and non-essential spending categories have remained unchanged or have accelerated,” BMI said.
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