Headline inflation likely slowed to 7 percent in April as some food prices started moderating, according to an economist. “Some food prices already started to ease recently on better weather conditions that led to some increase in supply that helps in lowering food prices, after some storm damage in the latter part of 2022 up to early 2023, especially the shear line that hit some parts of the Visayas and Mindanao,” RCBC chief economist Michael Ricafort told the Philippine News Agency (PNA) on Thursday. He attributed the lower prices of food to the limited importation of sugar and onions, the one-year extension of the reduced import tariffs on pork, rice, corn, coal, among others, as well other non-monetary measures to help improve local supply. Ricafort’s forecast for the month was lower than the 7.6 percent inflation recorded in March. It is, however, still higher than the government’s 2 to 4 percent target band. While inflation is expected to have cooled down, Ricafort said offsetting risk factors that could still lead to some pick up in prices include higher rice prices, higher electricity and water rates, and higher pork prices due to the African swine fever (ASF). He said El Niño, which will likely hit the country in the latter part of the year until early next year, could also reduce agricultural production and supplies that could lead to some pick up in prices and overall inflation. Ricafort, however, noted that inflation could have already reached the peak in the first quarter of the year and could start to ease significantly in the second half of 2023 due to higher base effects. “The anniversary of the local wage hikes, transport hikes, and second-round inflation effects starting June-July 2023 would quantitatively lead to further year-on-year deceleration of year-on-year inflation in the second half of 2023 due to much higher inflation base effects by then that could potentially lead to much slower inflation rate to as slow as 3 percent to 4 percent year-on-year levels by the latter part of 2023,” he added. The Philippine Statistics Authority will release the official April 2023 inflation data on Friday.

Source: Philippines News Agency