Most analysts expect higher April inflation

MANILA, Philippines — Consumer price growth likely picked up in April as base effects faded and utility costs rose, according to a poll of economists.

Six out of 10 expect inflation to have risen last month amid higher electricity rates and fading base effects.

Forecasts ranged from 1.6 to 2.1 percent, with a median of 1.9 percent, indicating that inflation could rise from 1.8 percent in March. However, the figures remain well below the Bangko Sentral ng Pilipinas (BSP)’s target ceiling of four percent.

Pantheon Macroeconomics chief emerging Asia economist Miguel Chanco gave the highest forecast at 2.1 percent, citing a rebound in food inflation supported by base effects.

“Some of this lift should be offset by a sharper transport deflation,” Chanco said, adding that “as long as inflation remains this muted, the Monetary Board will continue to be more open to additional rate cuts.”

Chanco said next week’s release of gross domestic product (GDP) data could further influence the BSP’s June policy decision.

Reinielle Matt Erece, an economist from Oikonomia Advisory & Research Inc., said the April inflation may hit two percent, driven by higher power and oil prices and election-related demand and infrastructure spending, though partly offset by lower food prices.

Four other analysts – Angelo Taningco of Security Bank, Aris Dacanay of HSBC, Nicholas Mapa of Metrobank and Citi Research – see inflation at 1.9 percent in April.

They said soft food and fuel prices, as well as the impact of continued rice deflation, could help keep inflation subdued, but noted that higher electricity rates may have exerted some upward pressure.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas expects April inflation to remain steady at 1.8 percent, the same as in March.

Meanwhile, BPI lead economist Jun Neri, RCBC chief economist Michael Ricafort and UnionBank chief economist Carlo Asuncion see inflation easing further to 1.6 percent.

Neri pointed to broad-based declines in key food items and stable oil and cooking gas prices. However, meat prices remained elevated, while electricity and transport costs rose, offsetting the downward pressure on inflation.

“Considering the current inflation outlook, the possibility of another rate cut by the BSP at their June policy meeting seems plausible,” Neri said, adding that the BSP chief’s recent signals have been more dovish than before.

Global oil prices have also remained stable and the peso has appreciated against the dollar. “If first quarter GDP growth reveals a disappointing performance, the argument for a June rate cut would be even more compelling,” Neri said.

Ricafort cited generally favorable weather that supported food supply, particularly in the northern Philippines. He said that lower prices of some vegetables, such as tomatoes, may have helped ease overall food inflation, although elevated pork prices due to lingering effects of  African swine fever likely provided some offset.

UnionBank’s Asuncion expects inflation to hit an average of 2.2 percent this year, lower than his previous forecast of 2.5 percent. He also projects inflation to reach close to three percent in 2026.

“Our estimated inflation trajectories in the next two years are well within the BSP’s inflation target range of two to four percent. Peak forecasted inflation is at 2.9 percent at year-end,” he said.

In the second half of the year, Asuncion said any inflationary impact from US President Donald Trump’s tariff hikes and broader global trade disruptions could start filtering through to retail prices.

The Philippine Statistics Authority is set to release April inflation data on May 6, followed by first-quarter GDP figures on May 8. Meanwhile, the BSP’s Monetary Board will hold its next policy meeting on June 19.