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Philippines: Inflation seen to peak September 2018
MANILA, Philippines — The growth in consumer prices may have already peaked this quarter as September is seen to begin a drier period more conducive to agricultural production and rice imports are set to arrive, said First Metro Investment Corp. (FMIC) in a report.
In its new Market Call report the investment banking arm of the Metrobank Group forecasts inflation growth to have eased slightly to 6.2 percent in September from 6.4 percent in August.
FMIC expects inflation to ease further to 5.4 percent in October and 5.2 percent in November.
Amid a high inflation environment, FMIC expects faster economic growth in the third quarter compared with six percent in the second quarter.
“Robust investment spending will largely contribute to faster growth in Q3 but may be tempered by higher consumer prices,” said the report.
“Enough to disturb our sober outlook, inflation has accelerated to a nine-year peak dues to astronomical rice and vegetable prices, with monsoon rains cutting supply, and crude prices at just below $70 per barrel. However, we still think that it may have reached its peak in Q3, since September has ushered a drier period, while rice imports should accelerate, in addition to September-October harvest,” it added.
Last week, economic managers said that despite the onslaught of Typhoon Ompong so close to the holiday season, growth in inflation can still be expected to peak within the third quarter and begin to ease in the fourth quarter of the year.
Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo said the blow to food prices would be eased with the implementation of non-tariff measures meant to address supply woes as well as the expected strengthening of the peso versus the dollar that can make imports cheaper during the fourth quarter of the year which traditionally sees higher consumer demand.
President Duterte recently issued an order removing non-tariff barriers to importation of rice and other agriculture products and streamlining administrative procedures for accrediting importers.
Duterte’s Administrative Order (AO) 13 is directed at the Department of Agriculture (DA), National Food Authority (NFA), Sugar Regulatory Authority (SRA) and Department of Trade and Industry (DTI).
Source: https://www.philstar.com/business/2018/09/28/1855265/inflation-seen-peak-september-2018#LBTgv3f9lOAUh9Ch.99