Headline inflation is expected to continue a downtrend in January amid global and domestic headwinds, a Daily Tribune poll showed over the weekend.
A Daily Tribune poll of analysts yielded a median estimate of 2.8 percent for January inflation, which is within the lower end of Bangko Sentral ng Pilipinas’, or BSP’s, 2.8 percent to 3.6 percent projection for the month.
If realized, January’s headline inflation rate would mark the third straight month of slowing inflation, and the third time inflation would fall below 5 percent since 4.9 percent in October 2023.
The Philippine Statistics Authority is scheduled to release the latest consumer price index data on Tuesday, 6 February.
Despite this projected slowdown, Security Bank Chief Economist Robert Dan Roces and Chinabank Chief Economist Domini Velasquez pointed out various factors that could pose challenges and keep inflation risks elevated throughout the year.
Weather, transport costs monitored
“While higher prices for agricultural items like rice, meat, and fruits, along with rising fuel costs, electricity, water rates, and annual sin tax adjustments all contributed to upward pressure, the overall trend remains positive,” Roces said in an emailed commentary.
“While there is potential for a further slowdown in the coming months, global volatility and domestic factors like adverse weather, wage adjustments, and transport costs require close monitoring,” Roces added.
Velasquez said several factors, including the impact of El Niño on rice production, geopolitical risks affecting freight costs and oil prices, and domestic risks like transport fare increases due to the Public Utility Vehicle modernization program, will keep inflation risks elevated throughout the year.
“Despite the anticipated slowdown in inflation, we believe the (Bangko Sentral ng Pilipinas) will remain vigilant,” Velasquez said.