Stocks plunge…

"There are notions that inflation may continue to go higher within the next couple of months," said Manny Cruz, an analyst at Manila-based Asiasec Equities.

He added that, "the contagion that affected Turkey and Argentina has slowly affected other emerging markets, like Indonesia. If you look at the patterns, there are some parallels between Indonesia and Philippines."

Regina Capital Development Corporation Managing Director Luis Limlingan said the negative surprise inflation report has prompted Bangko Sentral ng Pilipinas Governor Nestor Espenilla to reassess the consumer price index’s medium-term path.

“The central bank will meet on Sept. 27 to review policy and we view that a 50bps hike may be needed. Not only are we trying to tame the cost of goods, but the US may raise their key interest rates when the FED meets from Sept. 25-26,” he explained.

Calaycay said that, “as we have already entered the ‘-ber’ months, it bears watching if Filipinos spending habits, so closely correlated with the season of ‘joy,’ will keep to the patterns evidenced by history. Or, will it dampen demand? For otherwise, we can expect even higher numbers for the balance of the year.”

“For a market that has had a stellar, if not hyper-extended, run, a not-so-slight hiccup such as this, may leave everyone gasping for air,” he warned.