Economists anticipate that inflation in the Philippines in August will slow down, potentially falling below the central bank's 4% target, due to stable food prices.

Robert Carnell, ING's regional head of research and chief economist for Asia-Pacific, forecast that inflation may decrease to 3.3% from the nine-month high of 4.4% recorded in July.

Meanwhile, Jun Neri, lead economist at Ayala-led Bank of the Philippine Islands, estimates that inflation likely declined to 3.6% in August, attributing the drop to a reduction in key food item prices from the previous month. 

However, he noted that rising transport and energy costs could present upward risks to inflation.

Sarah Tan, an economist at Moody’s Analytics, also expects inflation to remain at 3.6% in August, attributing this to reduced tariff rates on rice, which may exert downward pressure on rice prices.

“The impact from Typhoon Carina that struck in July is expected to show up in August’s print in terms of higher prices for agricultural produce like vegetables,” she said.

Moody’s Analytics predicts that inflation will remain within the Bangko Sentral ng Pilipinas (BSP) target range of 2% to 4% for the remainder of the year, The Philippine Star reports.

However, inflation may settle at 3.7%, predominantly fuelled by weak rice imports and heavy rainfall impacting local food production, says Security Bank chief economist, Robert Dan Roces.

“However, the overall inflationary pressure may be partially offset by a stronger Philippine Peso and lower oil prices in August, which could mitigate imported inflation and reduce transportation costs,” Roces said.

Furthermore, chief economist for emerging Asia at Pantheon Macroeconomics, Miguel Chanco forecasts inflation to ease to 4.1% in August due to lower pump prices last month.

“Inflation should fall more dramatically from September, as favourable food-price base effects kick in, stemming from the surge in rice prices around this time last year,” he said.