Inflation likely surged to 5.6% in July led by higher electricity rates and rice prices plus a new wave of excise taxes on cigarettes, a global bank said, meriting a stronger response from the central bank.
Nomura economists said prices of widely-used goods likely hit another high last month, coming from a 5.2% print in June.
“The pick-up reflects the combined impact of the next round of increase in excise tax for tobacco as mandated by the TRAIN reforms, higher electricity rates and higher rice prices in July. Importantly, beyond these supply-side factors, we believe core inflation likely rose further as the output gap becomes more positive and demand-side pressures remain strong,” the bank analysts said in a report. — Melissa Luz T. Lopez