SCUTTLEBUTT

Worst over

Economists and analysts are coming together on a prognosis that the worst might be over in terms of price uptrends.

The only threat to inflation that remains is a full-blown Middle East war that is expected to have an impact on the global supply of crude oil.

But then again, any effect on oil prices from the conflict will be tempered by a generally weaker demand for crude and the planned production increase by the Organization of Petroleum Exporting Countries.

Thus, all bets on inflation are for a downtrend with a full-year inflation forecast of from 3.5 percent to 3.3 percent while maintaining a 2025 forecast of 3 percent.

A faster-than-expected rate of disinflation may embolden the Bangko Sentral ng Pilipinas to be more aggressive in its policy cuts, and we are opening the possibility of a total of 50 basis points (bps) cuts until the end of the year instead of only 25 bps.

The latest print was a 1.9-percent inflation rise in September, proving a cooldown. The number was the lowest since May 2020’s 1.6 percent.

The indicator taken month-on-month showed a decline of 0.24 percent in the consumer price index.

Coupled with a favorable base effect, the outcome of the extraordinary report was significantly lower than the 2.5 percent expected by most analysts.

Rice prices nearly doubled in September last year, leading to inflation jumping to 6.1 percent.

Stock brokerage firm AP Securities said month-on-month increases in the consumer price index from October to December 2023 were mostly benign, lowering the favorable base effects for the remaining months of 2024.

Much of the decline in the September inflation can be attributed to food, which saw a slower YoY increase of 1.4 percent vs 4.2 percent in August. Rice inflation, in particular, cooled to 5.7 percent from a year ago and showed a decline of -0.1 percent from the previous month.

An inflation downswing equates to an increase in consumer spending that AP Securities said would mainly benefit Puregold Price Club Inc., Jollibee Foods Corp., and Monde Nissin Corp. with the pickup in consumer spending, particularly for staples and food and beverages, on the back of moderating inflation coupled with further macroeconomic improvements.

The optimistic outlook is further underpinned by expectations of lower input costs, positive forex factors, and judicious expansion plans which should improve margins.

Hush money

A former mayor and an incumbent city chief executive have pocketed more than P3 billion in commissions from various building projects in a metro city.

“The reason the city went bankrupt and wallowed in a sea of debt was due to the connivance of the two. The former mayor during his term got the approval of the city council to secure hefty loans from various banks. But the catch was they got commissions from contractors, a clear violation of their mandate and a corrupt practice,” another former official said.

He said the former mayor was very cunning when it came to securing funding, especially from business moguls who had funded his candidacy in past elections.

“If there will be a debate, I will surely join and expose this,” the former official, a councilor who is running for a higher position in the same controversial city, told this paper.

He said he was the only councilor to oppose the kickbacks, as most of his colleagues also received grease money to keep their mouths shut.