MANILA (Reuters) - Philippine annual inflation likely quickened for a sixth straight month in June, a Reuters poll showed, leaving the door open for a third interest rate hike this year.
The consumer price index is expected to have risen 4.8 percent in June from a year earlier, still the highest in at least five years, due to a weaker peso and higher fuel prices, according to the median forecast of 11 economists.
The estimate was near the top end of the central bank’s forecast range of 4.3-5.1 percent for June. If correct, that would mark the fourth straight month that inflation has breached the central bank’s 2-4 percent target for this year and the next.
Policymakers forecast inflation to peak in the third quarter and return inside the central bank’s target range in 2019.
The central bank, which next meets on Aug. 9 to review policy, has raised interest rates in May and June this year, to temper price pressures and keep inflation expectations from spiking.
Angelo Taningco, economist at Security Bank, said he expects the central bank to hike rates for a third time this year, possibly next month, to tame upward price pressures from supply-side constraints and higher import costs due to peso’s weakness.
The peso has lost 6.6 percent of its value against the dollar so far this year, making it the second worst performing currency in the region after the Indian rupee.
The central bank revised downwards its average inflation forecast for this year to 4.5 percent from an earlier estimate of 4.6 percent at its meeting last month. It also lowered its average inflation projection for next year to 3.3 percent from 3.4 percent.
Reporting by Enrico dela Cruz and Karen Lema; Editing by Sunil Nair