Poll: Sept inflation seen hitting 5-month high on oil, storms
Inflation may have climbed to its highest level in five months in September, moving further above the government’s target as bad weather disrupted food supplies and higher oil prices added to cost pressures.
The consumer price index may have accelerated to 6.8 percent last month, according to the median estimate of 19 economists polled by the Inquirer last week.
That would mark a sharp increase from the 6.1-percent rate in August, ending four consecutive months of easing inflation.
If the estimate holds, the September reading would be the highest since April, when inflation reached 7.2 percent.
It would also fall within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 6.4 percent to 7.4 percent.
Overall, the market consensus and the central bank’s forecast both point to inflation moving further away from the government’s 3-percent target.
The Philippine Statistics Authority will release the September inflation data on Oct. 6.
Euben Paracuelles, chief Asean economist at Nomura, said core inflation, which excludes volatile food and energy prices, may have also picked up last month as higher costs filtered through to consumers.
He estimated headline inflation at 7.1 percent.
“We expect headline inflation to rise, driven by a pickup in food prices due to weather-related disruptions,” Paracuelles said. “In addition, retail fuel prices have also been adjusted higher, in line with resurging global crude oil prices.”
The government said the combined effects of enhanced monsoon rains and Tropical Cyclones “Luis,” “Maymay,” “Neneng” and “Pilandok” had damaged P4.38 billion worth of agricultural produce nationwide.
Meanwhile, local oil companies raised pump prices three times in September amid a prolonged war in the Middle East, according to energy department data.
Eugene Tan, associate economist at Moody’s Analytics, said the peso’s depreciation, which pushed it close to 63 per dollar last month, also added to inflationary pressures. “Beyond energy, the relatively weak peso is also contributing to higher import costs and broader price pressures,” Tan said while estimating a 6.5-percent inflation rate.
In August, the BSP delivered its third quarter-point rate increase of the current tightening cycle, lifting its benchmark to 5 percent as policymakers sought to “preempt” inflation risks from a severe El Niño episode and impending wage increases.
The move leaves the central bank facing a delicate trade-off: Containing price pressures without further weighing on an economy that expanded just 2.6 percent in the first half of the year.
Tan said the BSP could pause at its Oct. 22 policy meeting as the economy absorbs the effects of previous rate increases. But a hotter-than-expected inflation reading in September could prompt policymakers to tighten again, he said.
Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said inflation could remain above 6 percent through the end of the year, potentially putting pressure on the BSP to keep its focus on containing price increases. He estimated September inflation at 6.9 percent.
“I’m wary that it could bring another rate hike into the picture in the October meeting, in spite of the weakness in GDP (gross domestic product) growth,” Chanco said.
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