Inflation in the Philippines could accelerate to as high as 7.4% in September, the country's central bank said on Wednesday, ending four straight months of easing as storms damage crops, fuel prices rise and the peso slides to record lows.
The Bangko Sentral ng Pilipinas (BSP) said it expects September inflation to land between 6.4% and 7.4%, after price growth settled at 6.1% in August following four consecutive months of deceleration.
What is driving prices up
"Upward price pressures for the month are likely to be driven by weather-related increases in the prices of vegetables, fish, rice, and fruits. Increased domestic petroleum prices and depreciation of the peso could likewise contribute to higher inflation," the BSP said in an advisory.
Several areas of the Philippines have been battered by tropical cyclones Luis, Maymay, Neneng and Pilandok, along with the enhanced Southwest Monsoon. Estimated agricultural damage and losses have reached 4.38 billion pesos, according to the Department of Agriculture.
The Philippine peso has traded at the 62-to-the-dollar level for most of the month and hit a fresh all-time low of 62.86 to the dollar on September 14 — its 25th record low so far this year.
Partial offsets
The central bank said the pressures could be partly offset by lower meat prices and electricity rates. The Manila Electric Company (Meralco) announced a 4.09-centavo-per-kilowatt-hour reduction in its September rates, translating to an estimated 8-peso reduction in the total electricity bill of residential customers consuming 200 kilowatt-hours.
"The BSP will remain vigilant and guided by incoming data, particularly on inflation and growth prospects. It will continue to assess the impact of latest developments in the Middle East and recent weather disturbances on the country's inflation and economic outlook," it added.
Sources:
GMA News: Inflation could pick up to as high as 7.4% in September — BSP
The Bangko Sentral ng Pilipinas (BSP) said it expects September inflation to land between 6.4% and 7.4%, after price growth settled at 6.1% in August following four consecutive months of deceleration.
What is driving prices up
"Upward price pressures for the month are likely to be driven by weather-related increases in the prices of vegetables, fish, rice, and fruits. Increased domestic petroleum prices and depreciation of the peso could likewise contribute to higher inflation," the BSP said in an advisory.
Several areas of the Philippines have been battered by tropical cyclones Luis, Maymay, Neneng and Pilandok, along with the enhanced Southwest Monsoon. Estimated agricultural damage and losses have reached 4.38 billion pesos, according to the Department of Agriculture.
The Philippine peso has traded at the 62-to-the-dollar level for most of the month and hit a fresh all-time low of 62.86 to the dollar on September 14 — its 25th record low so far this year.
Partial offsets
The central bank said the pressures could be partly offset by lower meat prices and electricity rates. The Manila Electric Company (Meralco) announced a 4.09-centavo-per-kilowatt-hour reduction in its September rates, translating to an estimated 8-peso reduction in the total electricity bill of residential customers consuming 200 kilowatt-hours.
"The BSP will remain vigilant and guided by incoming data, particularly on inflation and growth prospects. It will continue to assess the impact of latest developments in the Middle East and recent weather disturbances on the country's inflation and economic outlook," it added.
Sources:
GMA News: Inflation could pick up to as high as 7.4% in September — BSP
