PH prices of key goods seen staying up
MANILA -Factors that are putting upward pressure on headline inflation in the Philippines are seen persisting for longer as the climate threatens food production while the seasonal rise in energy prices rolls in.
The United States-based Climate Prediction Center said in their latest monthly bulletin the El Niño climate phenomenon was now expected to prevail at least until March next year.
“El Niño is anticipated to continue through the Northern Hemisphere winter with a greater than 95 percent chance through January-March 2024,” the CPC said.
The agency added that the odds of at least a “strong” El Niño have increased to 71 percent from 67 percent as earlier forecast.
Meanwhile, the United Nations’ Food and Agriculture Organization (FAO) said its global benchmark Food Price Index dipped in August as ample supply pushed international shipment quotations decreasing, except for rice and sugar.
These two commodities were among the items that the Philippine Statistics Authority cited as having contributed to the uptick in headline inflation in August, pegged at P5.3 percent from 4.7 percent in July.
The FAO said its All Rice Price Index rose by 9.8 percent from July levels to reach a 15-year nominal high, reflecting trade disruptions in the aftermath of a ban on Indica white rice exports by India, the world’s largest rice exporter.
“Uncertainty about the ban’s duration and concerns over export restrictions caused supply-chain actors to hold-on to stocks, re-negotiate contracts or stop making price offers, thereby limiting most trade to small volumes and previously concluded sales,” the FAO said.
Meanwhile, the FAO Sugar Price Index rose by 1.3 percent from July, mainly triggered by heightened concerns over the impact of the El Niño phenomenon on sugarcane crops, along with below-average rains in August and persistent dry weather conditions in Thailand.
In a research note, Japan-based Nomura group said the Philippines — along with India and Thailand — is the Philippines as the most vulnerable to rising international oil prices. “Higher oil prices increase utility, freight and transportation costs, adding to inflation,” Nomura said.