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A broader look at today’s business Saturday, June 29, 2024 Vol. 19 No. 256
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BSP: INFLATION IN JUNE MAY HAVE HIT 3.4-4.2%
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By Cai U. Ordinario
3 issues thwart PHL bid to exit FATF grey list
XPENSIVE food items such as rice and the depreciation of peso may have led to faster inflation in June, according to the Bangko Sentral ng Pilipinas (BSP). KEY POINTS: BSP’S JUNE 2024 INFLATION FORECAST Q Forecast Range: 3.4% - 4.2% inflation expected for June 2024. Q Drivers of Inflation: Higher food prices, peso depreciation, and increased domestic oil costs.
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Q Monetary Policy Response: Maintained rates at 6.5% (Target RRP), 6% (overnight deposit), and 7% (lending facilities). Q Impact on CPI: Rice weights: 8.87% (All Income Households), 17.87% (Bottom 30%). Expected 14.8% decrease in rice prices over 12 months due to lower tariffs. Q Inflation Outlook: Less hawkish stance, aiming for midpoint (2% - 4%) target range with downside risks for 2024-2025.
affecting the outlook for inflation and growth in line with its datadependent approach to monetary policy formulation,” the BSP said. On Thursday, the BSP said the reduction in rice tariffs has boosted the optimism of monetary officials that a rate cut could happen in August. BSP Governor Eli M. Remolona
BM GRAPHICS: ED DAVAD
In its latest month-ahead inflation forecast, the BSP said inflation may average 3.4 percent to as high as 4.2 percent in June 2024. The high end of the forecast exceeds the revised 3- to 4-percent inflation target for this year (See: https://businessmirror.com. ph/2024/06/28/dbcc-maintainsgrowth-outlook-despite-raising-inflation-forecast/). Inflation increased to 3.9 percent in May 2024, placing the country’s average inflation rate of 3.5 percent in the January-to-May period (See: https://businessmirror. com.ph/2024/06/06/more-travelsnoted-as-inflation-hits-3-9/). “Increases in the prices of agricultural commodities like rice, vegetables, meat and fish, along with the peso depreciation and higher domestic oil prices, are the primary sources of upward price pressures for the month,” the BSP said in a statement. However, the BSP noted that expectations of lower electricity rates and fruit prices could contribute in bringing down the rise in commodity prices. “Going forward, the BSP will continue to monitor developments
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HE Philippines has again fallen short of exiting the grey list of the Paris-based Financial Action Task Force (FATF). In a briefing on Friday, FATF President T. Raja Kumar said the Philippines fell short of addressing three of the 18 action items needed to fight money laundering, terrorist financing, and proliferation financing of weapons of mass destruction in the country. Nonetheless, Kumar recognized the country’s “steady progress” in increasing its money-laundering investigations and prosecutions.
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HARMONY AT WORK Beia Latay, CEO of KonsultaMD, fields questions from the media during the press conference coinciding with the company’s “Harmony at Work” summit that aims to foster dialogue on employee well-being, inspiring leaders to invest in comprehensive wellness programs through innovative strategies and technologies. With her is Konsulta MD CCO Cindy Burdette. NONIE REYES
High prices, lower incomes bring down Pinoys’ consumer, business sentiment By Cai U. Ordinario
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IGH commodity prices and lower incomes have turned the consumer sentiment in the Philippines negative for the first time in 13 quarters, according to the latest data released by the Bangko Sentral ng Pilipinas (BSP). Based on the results of the Consumer Expectation Survey (CES), the BSP said the outlook of Filipino consumers for the next quarter was negative 0.4 percent, the lowest since the negative 2.2 percent posted in the first quarter of 2021. Consumer outlook for the
CES respondents’ increased pessimism stems from rising prices, higher household expenses, lower incomes, job scarcity, and concerns over government policies affecting inflation, traffic, public transportation, financial aid, and employment.—BSP’s Redentor Paolo M. Alegre Jr.
next 12 months slightly improved to 13.5 percent from the 13.4 percent posted in the previous CES results. It can be noted that the 13.4-percent consumer sentiment was the lowest, at least in the past four years. “For the CES, their pessimism, the increase in their pessimism was due to the faster increase in the prices of goods and higher household expenses, lower income, fewer available jobs, and some concerns about the effectiveness of government policies and programs on inflation management, traffic, and public transportation, the provision of financial assistance, and
labor and employment,” BSP Monetary Policy Sub-Sector Officer-inCharge Redentor Paolo M. Alegre Jr. said in a virtual briefing on Friday. Consumers, the BSP said, expect higher inflation, interest and unemployment rates, and a weaker peso in the next quarter and 12 months. The data showed that consumers anticipated the unemployment rate may increase, and the peso may depreciate against the US dollar for the second quarter of 2024, third quarter of 2024, and the next 12 months. Continued on A2
PESO EXCHANGE RATES Q US 58.8680 Q JAPAN 0.3662 Q UK 74.4268 Q HK 7.5385 Q CHINA 8.0987 Q SINGAPORE 43.3650 Q AUSTRALIA 39.1237 Q EU 63.0241 Q KOREA 0.0425 Q SAUDI ARABIA 15.6923 Source: BSP (June 28, 2024)