Philippines: Inflation at a five-month low – ANZ

Headline inflation eased to a five-month low on the back of easing transport prices and utility costs. Economists at ANZ Bank do not see any upward inflationary pressures in the coming months thereby providing substantial flexibility on monetary policy. USD/PHP is sitting at 50.550.

Key quotes

“Headline inflation decreased by 0.1% m/m in April due to a 3.2% m/m and 0.5% m/m decline in ‘Transport’ and ‘Housing and utilities’ prices, respectively.” 

“Core inflation eased to 2.8% y/y in April from 3.0% y/y previously. Consistent with softening domestic demand, it is likely to moderate further.” 

“We expect inflation to average 1.9% through the year, a touch below the BSP’s 2–4% target band.”

“Inflation dynamics remain supportive of the current monetary policy stance, and after the release of the CPI data the BSP Governor emphasised that the door for further easing through a variety of measures remains open.”