A BANK economist said Tuesday Philippine inflation is in a bottoming out process or near the base.
Joey Cuyegkeng, senior economist of ING Bank Manila, said in a report power outages during the dry season which starts this month meant higher power costs.
“The economy is slowly feeling the effects of the dry season with hotter days likely ahead. Oil prices for Asia seems to have bottomed out, especially as the floor of Dubai oil prices have been suggested at higher than the January average of $46/bl and closer to the February average of $56/bl,” Cuyegkeng said.
“Dubai crude oil price is Asia’s benchmark oil price which has been set higher last month by oil producing countries in the Middle East. With a steadily higher oil demand for Asia, Dubai oil prices may have also started the process of bottoming out. Unless another major downward price movement for oil happens, Philippine inflation may be in a long bottoming out process,” Cuyegkeng said.
He said power outages in Luzon might raise power costs during the dry season, while increases in tariffs of other utilities and wage pressures could offset some of the downward pressures from easing port congestion and more favorable food prices.