MANILA – With the ‘benign’ impact of the El Niño phenomenon and the stable global commodity prices, an economist from the financial services firm JP Morgan predicted a low Philippine inflation rate which would remain until next year.
According to JP Morgan chief Southeast Asian economist Sin Ben Ong, global commodity prices, including food prices, have been expected to remain weak in the succeeding months despite the dry season.
A modest inflation rate would remain towards the end of 2015, with a 0.4 to 0.6 percent year-on year. And from 1.8 percent, the inflation rate for 2016 could be down to 1.3 percent year-on-year.
“One of the concerns in the Philippines this year had been the impact of El Niño on domestic food prices, especially of rice and so far, it has been surprisingly benign,” Ong said in a research note.
The country’s inflation rate has been easing from 2.5 percent in February to 2.4 percent in March, 2.2 percent in April, 1.6 percent in May, 1.2 percent in June, 0.8 percent in July, 0.6 percent in August and the lowest 0.4 percent in September.
The El Niño dry spell has been predicted to disrupt the growth and inflation prospects in the Philippines and other neighboring countries due to the higher temperature and droughts’ implications to agriculture and other sectors.
But with ‘disinflation,’ the slowing rate of price inflation, experienced instead, the inflation rate has been expected to continuously be reduced marginally in the coming months.