PH Sept inflation pegged at 5.3%

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Private-sector economists agree that headline inflation in the Philippines will read at 5.3 percent in September—the same as in August—but there are also those looking at a further uptick just like the Bangko Sentral ng Pilipinas (BSP).

The BSP said on Friday that it expects the latest monthly readout to be within the range of 5.3 percent to 6.1 percent.

The midpoint of this range, 5.7 percent, suggests that the central bank expects the rate of growth in prices of goods and services that the average Filipino household commonly buys to have gone up for the second month in a row.

Goldman Sachs is also looking at a 5.7-percent print for September, mainly due to higher vegetable prices as well as higher electricity rates and domestic oil prices.

The American financial services group said their forecast was higher than the Bloomberg consensus of 5.3 percent.

Oil price surge

In a research note, Goldman Sachs said that across the region, headline inflation—for both retail and factory-gate prices—has ticked back up in a number of economies.

This “reflect[s] the surge in oil prices since the end of June as well as higher food [notably rice] prices in some cases,” they said.

Jonathan Ravelas, managing director of eManagement for Business and Marketing Services, also forecasts 5.7 percent, saying that inflation went slightly higher because of rising prices of fuel and rice as well as a weaker peso.

Supply constraints

Robert Dan Roces, chief economist at Security Bank Corp., said they were expecting the readout to tick up to 5.4 percent, mainly due to increases in the cost of electricity and food.

“These sectors have been subject to supply constraints and higher production costs, which have been passed on to consumers,” Roces said.

“Despite the slight uptick, our outlook for the coming months suggests that inflation is likely to be on a downward path,” he added, citing expectations of better supply conditions.

ING Bank expects inflation in the Philippines to stay elevated and above target for another month, but lower from August at 5.1 percent in September.

“Rice prices could still edge higher despite a presidential order capping rice prices on select varieties of the all-important staple,” The Netherlands-based group said.

“We could see Philippine inflation settle at 5.1 percent year-on-year, well above target and the main reason why the [BSP] has suddenly turned extremely hawkish,” ING Bank said.

The United Kingdom-based Pantheon Macroeconomics is also expecting 5.1 percent in September as they see inflation in the Philippines heading down over the coming months to settle at 2.9 percent by December. INQ