Economists predict a 1.9% up to 2.5% inflation in June. Raise in oil and food prices triggers inflation in the Philippines. The Philippine Statistics Authority official release on the June inflation is expected on July 7.
Food and oil trigger inflation in June
Inquirer quotes Nicholas Antonio T Mapa from Bank Philippines, who attributes food prices as the main driver for the inflation. Food supply is also in disrupt as partial lockdown is affecting production and distribution.
However, business, consumers/holders and other institutions could breathe again. Michael L Ricafort of Rizal Commercial Banking Corp explains that the less-restricting lockdowns may allow some pick up in both demand and spending activities. This will bring some uptick in the prices of some goods and services (Business World).
Robert Dan J Roces from Security Bank adds, “consumption may likely be clustered around essential items for most of the second half, thus curtailing price pressure overall” (Inquirer).
Liquefied Petroleum Gas (LPG) and electricity on the inflation
A decline in Liquefied Petroleum Gas (LPG) and electricity cost seem to maintain the oil and basic commodity high prices. In fact, The Department of Energy records an incline in the fuel prices for the past eight weeks. There is a raise of P1.05 a litre for gasoline, P0.85 a litre for diesel, and P.030 a litre for kerosene, as reported by The Manila Times.
Manila Electric Co (Meralco) also reports a declining of overall rates for June. The rates declined from P0.0216 per kiloWatt-hour (kWh) to P8.7252/kWh from the P.8.7468/kWh logged in the prior month. This signifies that households with electricity consumption of 200 kWh, 300 kWh, 400 kWh, and 500 kWh had their bills reduced by P4, P6, P9, and P11, respectively.
Sun Life Financial predicts the lowest percentage of inflation in June
Sun Life Financial’s Patrick M Ella predicts the lowest inflation at 1.9%. He bases the prediction on the suspension of face-to-face classes caused by COVID-19. Mr Ella predicts the recess will bring a smaller impact on the tuition fees (Business World).
Chidambarathanu Narayan from Standard Chartered Bank expects the inflation to go lower by December. He explained the inflation is to “edge down through the rest of the year, dropping to a low of 1% in December”, Inquirer quotes.
