Inflation in April is expected to show a slight dip below the lower end of the government’s full-year target range of between 2 percent and 4 percent, analysts from two international banks said in separate reports over the weekend.
In one report sent on Friday, the Australia and New Zealand Banking Group Limited (ANZ) said inflation in the Philippines slowed further to 1.7 percent in April from 1.8 percent the prior month due to slower price movements in key food items.
“Food inflation is likely to have softened further as international rice prices fell to their lowest level in April since December 2021,” ANZ said.
Sanjay Mathur, ANZ chief economist for Southeast Asia and India, said the upside risk may come from higher utilities inflation as electricity tariffs were raised over the month.
But this could be offset by lower crude oil prices and result in softer transport inflation as petrol prices eased in April.
“In sequential terms, we forecast a 0.1 percent month-on-month decline in headline inflation in April,” Mathur said.
Meanwhile, Deepali Bhargava, ING regional head of Research for Asia-Pacific, said in a separate report that inflation will continue to reflect lower food prices and the 5 percent drop in oil prices last month.
“We see April inflation at 1.94 percent,” Bhargava said.
He added, however, higher electricity prices will offset these gains, resulting in a slight uptick in headline consumer price index inflation.
Their forecasts echo the sentiments of other analysts who affirmed the Bangko Sentral ng Pilipinas’ (BSP) emphasis that the risk to the country’s inflation outlook had eased.
Earlier, the BSP estimated inflation in April will settle between 2.1 percent and 1.3 percent.
The central bank’s latest forecast is lower than the government’s full-year inflation target of between 2 percent and 4 percent.
If the 1.3 percent inflation forecast is realized, it will be the slowest in nearly six years since November 2019, when the inflation rate came in at 1.2 percent.
The Bangko Sentral cited easing prices of rice, fish, fruits and vegetables, as well as favorable domestic supply conditions, lower oil prices and the peso appreciation as contributing factors to the sagging prices of goods and services in the country.
Inflation slowed to 1.8 percent in March from 2.1 percent in February and 3.7 percent in March a year earlier, the Philippine Statistics Authority (PSA) reported in early April.
The slower price movements in March were associated with slower increases in the prices of food and non-alcoholic beverages.
Slower increases in housing, water, electricity, gas and other fuels, as well as transport, also contributed to the overall inflation in March.
The PSA is scheduled to release the inflation data for April on May 6.
