Security Bank: Aug inflation at 1.8%
Credit to Author: ANNA LEAH E. GONZALES| Date: Thu, 29 Aug 2019 16:18:08 +0000
THE country’s inflation is projected to settle at 1.8 percent this month from 2.4 percent in July on the back of slower increases in food, electricity and fuel prices, the Security Bank Corp. said on Thursday.
In a report, Security Bank economist Robert Dan Roces said the bank’s forecast range was between 1.3 percent and 2.4 percent, with the base effects from last year factored in.
“[B]ecause of base effects and anticipated consumption factors in the coming months, we might see inflation levels at sub-2 percent until November 2019,” he added.
“Our latest inflation estimates remains consistent with the prevailing assessment of a manageable inflation outlook over the policy horizon for the rest of year.”
Security Bank’s consumer price growth outlook for August is lower than the 2 percent projected by the
Union Bank of the Philippines on Wednesday. Both forecasts came weeks after First Metro Investment Corp. and the University of Asia and the Pacific predicted inflation to fall below 2 percent.
According to Roces, inflation continued easing this month because of the “slower price increases of key indices.”
Citing data from the Philippine Statistics Authority, the Security Bank economist said palay (unmilled rice) prices continued to decrease this month, with the average farmgate price of locally produced palay dropping to as low as P17.62 per kilogram.
The decline in palay prices, he added, could be attributed to Republic Act 11203, or the Rice Tariffication
Law, which liberalized the importation, exportation and trading of the staple.
“On top of this, meat prices, particularly pork, have been seeing some slight price dips amid African Swine Fever fears,” the economist said.
Electricity prices also continued to go down as Meralco slashed rates by around P0.42 per kilowatt hour (kWh) earlier in the month, according to Roces.
“This fourth consecutive power rate cut for the year was due to lower rates in the Wholesale Electricity Spot Market. Total downward adjustments now stand at around P1 per kWh for the last four months,” he said.
“Moreover, pump prices of fuel were relatively stable, while crude oil price (Brent) averaged $59 per barrel (bbl) compared with July’s $64.21/bbl,” Roces added.