Inflation rise likely in August – economist

The average inflation forecast for 2024 was also adjusted to 3.3 percent from the earlier 2.8 percent estimate while the 2025 projection was at 3.4 percent. (File Photo: Ben Green/Unsplash)

MANILA – Headline inflation is likely to rise slightly in August due to higher prices of oil and rice, an economist said on Friday.

Rizal Commercial Banking Corporation chief economist Michael Ricafort expects inflation hitting 5 percent in August from 4.7 percent in July.

“Main catalysts for inflation [include] higher local palay and rice prices, as world rice prices among 15-year highs recently partly due to warmer weather in some ASEAN (Association of Southeast Asian Nations) countries that produce or export rice, resulting in reduced rice exports,” he said.

Ricafort said storm damage in northern and central Luzon, the biggest producers of rice, corn, vegetables and other agricultural products, may also contribute to the uptick.

He added higher inflation in August could also be due to the increase in local and global oil prices, with global crude oil prices among four-month highs recently.

The Bangko Sentral ng Pilipinas (BSP) earlier adjusted the average inflation rate for this year to 5.5 percent from 5.6 percent.

The average inflation forecast for 2024 was also adjusted to 3.3 percent from the earlier 2.8 percent estimate while the 2025 projection was at 3.4 percent.

The BSP earlier said adjustments were made to take into account supply side pressures.