Tuesday, September 2, 2014

Inflation seen settling near 5% in August




Consumer prices likely rose at a faster pace in August on the back of persistent supply issues affecting the country’s goods stock and flow at major ports.


Most banks polled by the Inquirer said inflation likely increased faster than the previous month. Most expect the Bangko Sentral ng Pilipinas (BSP) to decide on another adjustment in interest rates this month to hold off pressures pushing prices higher.


“Inflation is likely to be near its peak in August, given that supply-side pressure continues to dominate,” DBS Bank’s Gundy Cahyadi said.


All banks said inflation remained elevated near 5 percent. Metrobank said consumer prices rose by 4.9 percent; DBS, 5 percent; Security Bank, 5 percent; BDO Unibank, 4.7 percent; Barclays, 4.8 percent, and Bank of the Philippine Islands, 5.3 percent.


For the month of August, the BSP said inflation likely settled between 4.7 and 5.5 percent.


“A sizeable uptick may again be due to persistent rise in food prices (vegetable, fish, rice and cooking oil) due to supply constraints that are, at least, partly attributable to congestion in our seaports,” BPI lead economist Emilio Neri Jr. told the Inquirer.


In July, consumer prices rose at a 33-month high of 4.9 percent from June’s 4.4 percent. For the year, the BSP expects inflation to average at 4.3 percent, which is above the top end of its target range of 3 to 5 percent. Paolo G. Montecillo



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