Analysts see May inflation at 2%


Headline inflation in May likely eased further from 2.2 percent in April, falling at the lower end of the central bank’s forecast range for the month, according to a consensus of private analysts polled by The Manila Times.

Four of the five analysts said inflation rate in May likely slowed to 2 percent as low food prices offset higher oil prices.

The most optimistic among the analysts expects inflation at a slower 1.9 percent.

The Philippine Statistics Authority (PSA) is scheduled to release official data on the May inflation on June 5.

Bill Diviney, economist at UK-based investment bank Barclays, sees inflation settling at 2.2 percent in May.

“We expect headline inflation to edge lower to 2 percent, as fall in prices of fresh vegetables offsets a rise in petrol prices,” he said.

Mabellene Reynaldo, analyst at Metrobank Research also estimates inflation decelerating to 2 percent, mainly on the base effect of the 4.5 percent in May 2014.

“Our forecast is 2 percent, mainly due to the high base in May last year. This base effect led to the broad slowdown in food and oil price growth,” she said.

Security Bank Corp. economist Patrick Ella and Maybank ATR Kim Eng economist Luz Lorenzo also see inflation settling at 2 percent but gave no reason for their projection.

Laying down the lowest projection is Nicholas Antonio Mapa, associate economist at Bank of the Philippine Islands. They are seeing a 1.9 percent inflation rate in May. However, he did elaborate other than saying theirs was a preliminary estimate.

Rice, power rates dropping
In an earlier statement, the Bangko Sentral ng Pilipinas said it expects the May inflation rate to range between 1.6 percent and 2.4 percent.

“Downward price pressures may come from the reduction in rice prices and power rates. However, these may be offset by the substantial increase in local oil pump prices as well as higher sugar prices,” BSP Governor Amando Tetangco Jr. said.

Headline inflation hit its slowest pace in 20 months at 2.2 percent In April, compared with 2.4 percent in March and 4.1 percent in the year-earlier period.

It was the slowest rise since August 2013, when inflation eased to 2.1 percent.

For full-year 2015, the central bank expects headline inflation to average at 2.3 percent before picking up pace at 2.6 percent in 2016.


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