The country's inflation rate will remain above the government's 2 to 4 percent target band, said private sector economists who slightly upgraded their price-rise forecasts for August.

A DAILY TRIBUNE poll of analysts over the weekend yielded a median estimate of 5.0 percent for August inflation, within the 4.8 to 5.6 percent forecast given by the Bangko Sentral ng Pilipinas (BSP) last Thursday.

If the August number matches the poll consensus, the median estimate will be higher than the 4.6 percent print in July 2023 but lower than the 5.4 percent inflation rate in June 2023.

The Philippine Statistics Authority is expected to release the August inflation data on Tuesday, 5 September.

Bank of the Philippine Islands's lead economist Emilio "Jun" Neri Jr. said higher prices of liquefied petroleum gas (LPG), kerosene, diesel and vegetables likely drove the Consumer Price Index much higher month-on-month.

"Lower electricity (and) other food items may offset some of this," Neri said in an email to Daily Tribune.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said that the country's higher local palay and rice prices are one of the "main catalysts" for the August inflation print due to weather disturbances in most Southeast Asian countries affecting rice exports.

He added that the agriculture damages caused by tropical storms in Northern and Central Luzon likewise affected the prices in the country.

Ricafort likewise attributed the higher fuel prices and depreciating Philippine Peso against the US Dollar to the slightly higher inflation rate for August.

"However, these are offset by mostly softer economic data in China and other countries, as partly weighed by higher inflation that reduced household spending and higher interest rates that led to higher borrowing costs," Ricafort said in a Viber message.

Security Bank's senior assistant vice president and chief economist Robert Dan Roces also shared the same insights with other economists, saying that the primary factors contributing to the slight increase in the August inflation print are fuel and food prices.

"Although the current diesel pump price is significantly lower than the P75 per liter average recorded in June of the previous year, food and fuel prices remain the main drivers of inflation. Notably, farm gate prices of other food items decreased in August compared to July," Roces said in an email.

Despite these factors, Roces said the retailers may either be reluctant to reduce current prices or the price reduction price may be taking some time.

Roces also underscored that the current inflation increase is mainly driven by the price of rice, which has recently surged by up to P10 per kilo.

"Looking ahead, we still see that inflation will fall into the Bangko Sentral ng Pilipinas (BSP) target range of 2 percent to 4 percent by the fourth quarter of this year, barring sustained spikes in rice and fuel in the remaining months of 2023," Roces said.

China Banking Corp. chief economist Domini Velasquez said core inflation is expected to continue its downtrend to around 6.0 percent in August despite the projected higher headline rate.

"If realized, we do not expect BSP to react immediately to the expected inflation print with higher policy rates. Shocks for August were largely supply-side but have not, so far, detailed the inflation path toward the target range in (the fourth quarter). We still expect inflation to fall within the BSP's target by November," Velasquez said.