MANILA: Asian inflation demonstrated tenacity after quickly picking up for the first time in seven months in August. This was essentially because of an increase in food and transportation costs, which kept the central bank under pressure to maintain its pessimistic stance.
The consumer price index ( CPI ) increased by 5.3 % year over year in August, surpassing economists’ 4.7 % forecast in a Reuters poll, which matched the pace of the previous month. However, the central bank’s 4.8 % to 5.6 % projection for the month was still in effect.
Core inflation decreased from the previous month’s 6.7 % to 6.1 % in August, excluding volatile energy costs.
The central company’s assessment that the nation was still experiencing inflation was supported by the data from Tuesday, which also increased the likelihood that it could continue raising its policy rate after holding it steady at 6.25 percent during its previous three meetings.
The Bangko Sentral ng Pilipinas( BSP ) stated in a statement that it” stands ready to adjust the monetary policy stance as necessary” in response to the data in order to stop the spread of price pressures and the appearance of additional second order effects.
Inflation in August increased year-to-date inflation to 6.6 %, well above the central bank’s 2 percent to 4 % comfort range.
According to ING analyst Nicholas Mapa, the path of inflation for the upcoming several months may be determined by the price of rice, transportation, and electricity. In a post on program X, he stated that the BSP” could contemplate remuneration if this becomes pattern ,” despite his expectation that it will remain on hold.
On September 21, the Bangko Sentral ng Pilipinas ( BSP ) will convene to discuss policy.
The Philippines has set price ceilings on wheat, which it claimed may stay in place as long as the government deemed them important to control food prices. 35 % of CPI is accounted for by foods.
The financial planning minister added that the Philippines, one of the largest importers of rice in the world, may reduce grain tariffs to help lower home costs in response to the sudden increase in consumer prices in August.
We may apply a transitory and calibrated reduction in tariffs, according to Economic Planning Secretary Arsenio Balisacan,” to largely balance the rise in global prices and reduce the impact on consumers and households.”