Inflation rate is expected to rise beyond 5 percent in September from 4.9 percent in August on higher prices of food and agricultural products triggered by recent storms, an economist said Monday.
“Inflation which recently peaked at 4.9 percent last month will likely see price pressures heat up anew in September,” ING Bank Manila senior economist Nicholas Mapa said in a report.
“We expect inflation to move past 5 percent as recent and approaching storm systems will undoubtedly figure into this month’s fruit and vegetable inflation numbers,” he said.
He said fish and meat prices would likely remain elevated at a time that energy costs rise as crude oil stayed close to $70 per barrel.
“Furthermore, utility companies and retail fuel distributors have recently announced additional rounds of price increases, all adding to the supply side pressure on headline,” he said.
Mapa said while the pickup in imports might be a sign of renewed demand, it also reflected an improvement in domestic production that could help increase the supply of basic goods and services.
“Despite this, the price pressures appear to be accelerating at the worst possible time with base effects unfavorable in September,” Mapa said.
Inflation in August rose to 4.9 percent from 4 percent in July, according to the Philippine Statistics Authority. It was the fastest since January 2019 and brought the average inflation in the first eight months to 4.4 percent, over the 2021 target range of 2 percent to 4 percent.
Prices of food and non-alcoholic beverages increased 6.5 percent in August, while recreation and culture index went up by 0.5 percent, after recording annual decreases since August 2020.
Inflation averaged 2.6 percent in 2020, below the midpoint of the target range of 2 percent to 4 percent.
