Inflation likely exceeded BSP target in April
Inflation likely sizzled and jumped above the upper end of the Bangko Sentral ng Pilipinas (BSP) target range of 2-4% manageable price increases in April.
All April 22 inflation forecasts collected by the Inquirer last week were above the 4% posted in March. The Philippine Statistics Authority (PSA) Consumer Price Index (CPI) report for the past month will be released on May 5.
In the Inquirer poll, Domini Velasquez of China Bank, Goldman Sachs Economics Research and Nicholas Antonio Mapa of ING had the highest headline inflation forecast of 4.8% year-on-year for April.
Mapa attributed his estimate to “upside pressure from rising transport costs and expensive utilities”, adding that “food inflation could also rise, particularly for grain products”. Russia’s invasion of Ukraine has pushed up global commodity prices, especially food and oil, and the World Bank warned last week that high prices could extend into 2024.
“Second-round effects may also be felt as higher transport costs trickle down to the rest of the CPI basket,” Mapa added.
High inflation, coupled with a possibly “robust” performance in gross domestic product (GDP) in the first quarter “could be enough to convince BSP Governor Benjamin Diokno to continue his rate hike by May or more likely by June. “, said Mapa. The next meeting of the BSP on the direction of monetary policy on May 19 will take place a week after the government’s first quarter GDP report on May 12.
Emilio Neri Jr. of Bank of the Philippine Islands, Jonathan Ravelas of BDO Unibank, Robert Dan Roces of Security Bank, as well as Agham Cuevas of the University of the Philippines-Los Baños (UPLB) predicted 4.7%. “Inflation remains mainly cost-driven and now fully reflects the effects of the Russian-Ukrainian conflict on prices. We expect inflation to peak this quarter and exceed the 4% level for the rest of the year,” Roces said.
Shreya Sodhani of Barclays, Gareth Leather of Capital Economics, HSBC Global Research, Miguel Chanco of Pantheon Macroeconomics, Alvin Joseph Arogo of Philippine National Bank, Luis Gerardo Limlingan of Regina Capital and Michael Ricafort of Rizal Commercial Banking Corp. predict a 4.6% inflation rate last month. “Typhoon ‘Agaton’ probably added to inflationary pressure as well,” Arogo noted.
For Sanjay Mathur of ANZ, Makoto Tsuchiya and Sian Fenner of Oxford Economics, Patrick Ella of Sun Life Financial, Loke Siew Ting of United Overseas Bank and Victor Abola of Asia and the Pacific University, the rate of Commodity price increase in April reached 4.5 percent year-on-year. “We believe inflationary pressure will persist given our forecast for higher global commodity prices over the longer term, which will fuel domestic prices as the Philippines is a net importer of commodities,” the Oxford economists said. Economics.
Citi’s Nalin Chutchotitham predicted 4.4%, while the lowest forecast of 4.3% was shared by Steven Cochrane of Moody’s Analytics and Ruben Carlo Asuncion of UnionBank of the Philippines, the latter also pointing to the direct effects of a weaker peso on inflation. INQ
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