THE country’s inflation rate is seen to slow down in September this year due to the convergence of lower food prices and favorable base effects in the last quarter of the year, economists said.
According to economic experts polled by the BusinessMirror, inflation will likely fall between the range of 4.2 percent and 5 percent in September this year, or will average at 4.55 percent during the month.
The economists’ forecast is slightly higher than the forecast range of Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. announced earlier, at 4.1 percent to 4.9 percent. Its computed average inflation rate is also lower than August’s inflation of 4.9 percent.
Among the drivers cited by the economists echo that of Tetangco’s made public at the end of September this year.
Main factors of lower inflation expectations include lower rise in food prices, favorable base effects and drop in petroleum prices.
“Aside from favorable base effects, lower electricity charges along with month-on-month drops in food and petroleum prices could lead to a sharp deceleration in the headline print,” Bank of the Philippine Islands (BPI) economist Emilio Neri Jr. told the BusinessMirror.
Neri forecasted inflation to hit 4.2 percent in September.
“The impact of Typhoon Mario may have not have been as severe as Glenda’s impact on food supply,” he added.
ING Bank economist Joey Cuyegkeng said he is hopeful that an efficient rice importation program of the government could help ease price pressures on the staple food.
“Base effects on a positive note is likely to kick in soon. And this would likely confirm that we have seen the peak of inflation,” Cuyegkeng said, adding he sees inflation hitting 4.6 percent for September.
With lower inflation expectations in September this year, Hongkong and Shanghai Banking Corp. economist Trinh Nguyen said that the country’s monetary board will likely pause from its tightening cycle in the upcoming October 23 meeting.
“We expect easing inflation to give the BSP space to pause at the October meeting,” Nguyen said. He sees inflation hitting 4.4 percent for September.
Meanwhile, Security Bank economist Patrick Ella sees inflation hitting 5 percent, while First Metro Investments Corp. Senior Vice President Reynaldo Montalbo Jr. said inflation likely hit 4.5 percent. Barclays economist Rahul Bajoria sees inflation at 4.6 percent.
The Philippine Statistics Authority is expected to release the actual September inflation numbers on Tuesday.