August 8, 2022

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Inflation likely quickened in July

2 min read

By Keisha B. Ta-asan 

INFLATION likely accelerated in July due to higher food prices and transport fares, but a cut in electricity rates and rollback in pump prices may have tempered the price pressures, according to analysts.

A BusinessWorld poll of 14 analysts yielded a median estimate of 6.2% for July inflation, well within the 5.6-6.4% forecast of the Bangko Sentral ng Pilipinas (BSP).

This would also be faster than the 6.1% print seen in June and the 3.7% in July 2021, as well as exceed the BSP’s 2-4% target band for the fourth straight month.

If realized, the July print would be the highest in 45 months or nearly 4 years since 6.9% in October 2018.

The Philippine Statistics Authority (PSA) will release the July consumer price index (CPI) data on Friday. 

“Inflation for the month was driven by the continued increase in food prices, further transport fare hikes, and peso depreciation,” the BSP said in a press release on Friday evening.   

Prices of food have gone up in recent weeks, reflecting the impact of higher oil prices and the weaker peso against the US dollar.

“Meanwhile, lower oil prices, reduction in electricity rates in Meralco-serviced areas, and lower pork prices are likely to temper in part said price pressures,” the BSP said.

Customers of Manila Electric Co. (Meralco) saw lower electricity bills in July after the overall rate went down by P0.7067 to P9.7545 per kilowatt-hour (kWh).

“We estimated that inflation in July slowed down to 5.8% as the decline in the prices of oil, electricity in Meralco-serviced areas, and some food such as meat and fish,” Domini S. Velasquez, chief economist at China Banking Corp., said in an e-mail. 

Sun Life Financial economist Patrick M. Ella said the slowdown in global oil prices and successive pump price cuts may have slowed the monthly gain in the CPI.

Fuel retailers cut pump prices in July as global oil prices have eased below $100 per barrel in recent weeks.

In July alone, oil companies…

Neil

2022-07-31 12:33:58

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