MANILA: Headline inflation likely eased to within the government’s 2 to 4 percent target in August following the uptick in July, an economist said on Tuesday.
In a Viber message, Rizal Commercial Banking Corporation chief economist Michael Ricafort said headline inflation likely decelerated to 3.8 percent last month from the 4.4 percent in July.
Ricafort said rice imports at a reduced tariff rate of 15 percent from 35 percent, on top of the lower world price of rice and other major global commodities, likely contributed to the downtrend.
“There could still be spillover effects on inflation by the Typhoon Carina and the recent habagat, but price freeze [is still] in effect in areas where state of calamity was declared up to 60 days or until September 24, 2024,” he said.
Ricafort said relatively stronger peso versus the US dollar could also reduce import costs and overall inflation.
Ricafort said headline inflation may likely settle within the Bangko Sentral ng Pilipinas’ target in the remaining months of
the year.
He said this could justify further BSP rate cuts that would match any future Fed rate cuts from 2024-2026 to maintain healthy interest rate differentials.
The Philippine Statistics Authority is scheduled to release the August 2024 inflation data on Thursday.
Source: Philippines News Agency