I LATION could have resumed rising last month following renewed pressure on oil prices and elevated food and transport costs, analysts said.
The median forecast in a Manila Times poll was 6.7 percent, higher than the 6.1 percent recorded in August but within the Bangko Sentral ng Pilipinas’ (BSP) 6.4- to 7.4-percent estimate for September.
A year earlier, inflation was substantially lower at 1.7 percent.
A 6.7-percent result would mark the first rise since an easing from April’s high of 7.2 percent and also mean a seventh straight month of consumer price growth exceeding the BSP’s 2.0- to 4.0-percent target.
Data for September will be released by the Philippine Statistics Authority tomorrow, Oct. 6, and an increase could lead to the central bank hiking interest rates later this month.
Deutsche Bank chief economist Juliana Lee, with the lowest forecast at 6.3 percent, said headline inflation was likely to have reversed from four consecutive months of declines.
“Domestic fuel pump prices remain elevated amid another rise in global oil prices,” she said.
“Rice prices crept up in September; this, in addition to unfavorable base effects from last year, could send rice price inflation above 20 percent year on year in the month.”
Philippine National Bank economist Alvin Arogo said inflation could have accelerated to 6.4 percent, mainly due to “higher oil prices and the adverse impact of the persistent heavy rains on the retail cost of key food items.”
Union Bank chief economist Ruben Carlo Asuncion said inflation would have risen to 6.5 percent, interrupting the gradual disinflation trend seen since April.
“The expected acceleration was primarily driven by weather-related supply disruptions associated with intense habagat (southwest monsoon) conditions, persistently elevated rice prices, a weaker peso that briefly probed the 63-per-US dollar level, and higher energy costs as oil prices remained well above year-ago levels,” he said.
“Broader manufacturing cost pressures and still-elevated inflation expectations may have also contributed to inflation persistence.”
Security Bank Corp. economist Angelo Taningco and Rizal Commercial Banking Corp. chief economist Michael Ricafort, meanwhile, both expect inflation to have risen to 6.7 percent.
Taningco said higher global oil and rice prices, rising food prices due to rainfall and flooding, more expensive manufactured goods and the weaker peso, which has increased the cost of imports, would have driven the increase.
Ricafort also said the rise could be due to “weaker peso that led to higher importation costs and overall inflation.”
For ING Asia Pacific regional research head Deepali Bhargava, September inflation could have hit 6.8 percent.
“Fuel and El Niño-related food price pressures are likely to push Philippine inflation higher,” she said.
“Domestic fuel prices rose by more than 15 percent during the month, while adverse weather conditions continue to drive up food costs, particularly rice.”
ANZ Research chief economist Sanjay Mathur, with the highest forecast of 7.0 percent, said transport inflation likely accelerated amid a renewed surge in global crude oil prices.
“Food inflation is also likely to remain elevated primarily due to high rice prices,” he said.
“Going forward, we expect less downside risk for inflation as second-round effects and food costs push CPI higher,” he added.
Last week, the BSP said it would “remain vigilant and guided by incoming data, particularly on inflation and growth prospects.”
“It will continue to assess the impact of latest developments in the Middle East and recent weather disturbances on the country’s inflation and economic outlook,” it added.
The central bank’s policymaking Monetary Board has so far raised key interest rates three times this year, by 25 basis points each time, after inflation surged in the wake of the war in the Middle East.
The BSP’s benchmark rate currently stands at 5.0 percent. The Monetary Board’s next policy meeting will be on Oct. 22.
