By Mark T. Amoguis, Senior Researcher
THE general increase in prices of widely used goods may have slowed further in more than three years due to lower fuel, rice, and power prices in August, the central bank said on Friday.
The Bangko Sentral ng Pilipinas’ (BSP) Department of Economic Research said in an e-mail to reporters that it sees inflation for August within the 1.3-2.1% range.
“Lower domestic prices for gasoline, diesel and kerosene, the continued decline in rice prices as well as the downward adjustment in electricity rates dampened inflation pressures during the month,” the central bank’s economic research unit said.
“These could be partly offset by the recent depreciation of the peso and higher prices of selected food items,” it added.
The lower end of the central bank’s estimate matches the 1.3% inflation rate logged in June, July, and August 2016, while it would be the slowest reading since 0.9% clip recorded in May 2016.
Meanwhile, the upper band of the forecast range is equal to November 2016’s print of 2.1% and would the slowest pace since October 2016’s 1.8%. This also compares to the 2.4% logged in July and 6.4% in August last year.
In the seven months to July, inflation reached 3.3%, cooling from previous year’s 4.5%.
The Philippine Statistics Authority (PSA) will report the August inflation figure on Sept. 5.
Latest data from PSA show average retail price of well-milled rice dropped 7.3% year on year, both during the first two weeks of August reaching P42.71 per kilogram in the second week.
Likewise, average retail price of regular milled rice declined by 9.2% and 9.8% during August’s first two weeks, settling at P42.57 per kilogram at the end of the second week.
Manila Electric Co.’s (Meralco) power rates for households in the National Capital Region and its surrounding areas continued to drop for the fourth straight month in August by P0.4176 per kilowatt-hour (kWh) to P9.5674/kWh.
This represented a decrease of almost P1/kWh since May this year, according to Meralco.
During the Aug. 8 policy meeting, the BSP forecasts inflation print at 2.6% this year from already downward revised 2.7% that was adopted in its June 20 review, while it slashed next year’s forecast to 2.9% from three percent previously.
The central bank sees inflation to range 2-4% this year.
The BSP gave its inflation forecast for 2021 — 2.9% with a tilt “somewhat to the downside” due to prospects of slowing global growth.
In its July meeting, the Development Budget Coordination Committee expected inflation within the range of 2.7-3.5% (from 3-4% previously) this year, while maintained the 2-4% projection for next year until 2022.