MANILA, Philippines - Inflation likely surged to a two-year high in December on the back of spikes in food prices due to Super Typhoon Yolanda, UK-based Barclays said.
In a research note, the investment banking firm said it expects the rise in domestic prices at 4.1 percent in December, the fastest since December 2011 when the rate settled at 4.2 percent.
“Inflation to rise on Typhoon Haiyan’s (local name: Yolanda) impact on food prices and upward pressure on electricity and fuel prices,” Barclays said.
Typhoon Yolanda devastated the Visayas and nearby provinces in November and killed at least 6,166 individuals, based on the latest government estimates.
The super typhoon also destroyed P18.34 billion worth of roads, bridges, buildings, and other infrastructure, and another P18.35 billion worth of agriculture crops.
The destruction in food crops prompted supply shocks that may have translated to a temporary rise in prices, Barclays noted.
Meanwhile, consumers also face a pending increase in electricity rates as largest power distributor Manila Electric Co. (Meralco) has a petition for a price hike being tackled by the high court.
Meralco earlier announced a P3.44-per kilowatt-hour hike in its generation charge for December. However, the Supreme Court issued a temporary restraining order on the price increase last Dec. 23.
Barclays’ projection for December inflation is within the Bangko Sentral ng Pilipinas’ forecast range of 3.8 percent to 4.7 percent.
The central bank on Dec. 26 made the forecast and cited Yolanda’s effects on food prices as the main culprit for the surge in inflation.
But the BSP, mandated to keep prices stable and ensure this is supportive of robust economic growth, stressed it will remain watchful of the pressures affecting domestic prices.
Inflation climbed to a nine-month high of 3.3 percent in November, bringing the 11-month average to 2.8 percent.
The BSP forecast full-year average to reach 2.9 perce