Julia Goh, Senior Economist at UOB Group, and Loke Siew Ting, Economist, assess the latest release of Philippine inflation figures.
Main conclusions
Headline inflation in the Philippines rose again to 5.3% yoy in August, after six consecutive months of moderation to 4.7% yoy in July. The reading defied our expectations for a slowdown to 4.6% and the Bloomberg consensus of a stable rate at 4.7%. This result was due in particular to a sharp increase in food and fuel prices following the transitory effects of two typhoons (Egay and Falcon) that hit the country last month. The increase in the cost of goods related to leisure, sports and culture and of secondary education services also contributed to the acceleration of general inflation in August.
New circumstances, such as typhoons, a further acceleration of world oil prices above $90 per barrel, and new disruptions in the supply of basic foodstuffs, have meant a substantial change in the path of inflation in the short term. Added to this is the persistent concern about new increases in transport fares, adjustments to the minimum wage that are higher than those expected in other regions and the possible repercussions of the increase in toll rates on the prices of the main agricultural products at the local level. Consequently, we revised our inflation forecasts for the full year, which stand at 6.0% for 2023 (vs. 5.3% previously, BSP est: 5.6%, 2022: 5.8%) and 3.5% for 2024 (vs. 2.5% previous, BSP est: 3.3%). This upward revision also pushes back our previous forecast for inflation to return to the BSP target mid-range of 2.0%-4.0% in Q1 2024 from Q4 2023.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
