Singapore bank hikes Phl inflation forecast

DBS Bank Ltd. of Singapore raised its inflation forecast for the Philippines this year to 3.7 percent from 3.3 percent previously, a development which could prompt the Bangko Sentral ng Pilipinas (BSP) to keep rates higher for longer.

- KEISHA TA-ASAN

In a note, DBS economist Radhika Rao said Philippine inflation would likely be driven by base effects and higher food prices in the coming months, which will push inflation to above the two to four percent target in the first half.

She also noted that there would be inflationary pressures from other nonfood catalysts such as higher transport fares, higher electricity tariffs, spike in global oil prices and the implementation of a legislated increase in minimum wage.

"Factoring in these drivers, we revise our 2024 inflation forecast to 3.7 percent year on year," Rao said.

Inflation averaged 3.3 percent from January to March, staying within the BSP's two to four percent target range, despite picking up for the second straight month in March to 3.7 percent from February's 3.4 percent.