July inflation seen higher, rate hike likely: Reuters poll

Reuters

Posted at Aug 06 2018 03:10 PM | Updated as of Aug 06 2018 03:41 PM

MANILA - Philippine annual inflation likely quickened for a seventh straight month in July due to higher food, fuel and utility costs, a Reuters poll showed, raising the chances of a third interest rate hike this year.

The median forecast in a poll of 15 institutions was for the consumer price index to rise 5.5 percent in July from a year earlier, which would mark the fifth consecutive month that the rate has breached the central bank's 2-4 percent goal.

The July forecast, which matched the midpoint of the central bank's 5.1-5.8 percent estimate for the month, would be the highest in more than five years. 

Forecasts for the data, scheduled to be released on Aug. 7, ranged from 5.2 percent to 5.7 percent.

Bangko Sentral ng Pilipinas Governor Nestor Espenilla said last month the central bank was considering "strong monetary action" at its August meeting to tame inflation and foreign exchange volatility. 

Some economists have taken that to mean authorities were preparing the market for as much as a 50 basis points rate hike, following the two increases of 25 basis points each in May and June.

Inflation is expected to average 4.5 percent this year, the central bank has said. For next year, it is projected to return within the target and average 3.3 percent.