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Philippines Policy Rate 6.5% (consensus 6.5%) in Jun-24

• The BSP's decision to maintain the policy rate at 6.5% aligns with consensus forecasts. It reflects confidence in managing downside inflation risks despite ongoing pressures from higher food, transport, and electricity prices.
• Favourable domestic growth prospects, supported by a strong labour market and robust net exports, allow the BSP to hold steady on monetary policy while remaining cautious about potential external spillovers.
• Anticipated easing of price pressures in the year's second half could provide scope for a less restrictive policy stance. Still, the BSP remains vigilant, ready to adjust settings to maintain price stability and support sustainable economic growth.

Philippines CPI Inflation 3.9% y-o-y (consensus 4.0%) in May-24

- Philippine CPI inflation in May 2024 reached 3.9% y-o-y, the highest since Nov-23, yet slightly below the 4.0% consensus and below the historic average, indicating moderated inflationary pressures.
- Despite the rising headline rate, core inflation slowed to 3.1%. PPI inflation also contracted by -0.77% in April 2024, suggesting reduced upstream cost pressures may temper future CPI inflation increases.

Philippines Policy Rate 6.5% (consensus 6.5%) in May-24

• The BSP maintained its policy rate at 6.5%, aligning with the consensus forecast, reflecting a balanced approach amid persistent inflationary pressures and moderated economic activity.
• While the inflation forecast for 2024 eased slightly to 3.8%, the forecast for 2025 increased to 3.7%, indicating persistent inflation risks from higher transport, food, electricity, and oil prices.
• The BSP's restrictive policy stance aims to anchor inflation expectations and ensure price stability, with readiness to adjust policy settings as necessary, supported by government measures to address supply-side pressures.

Philippines CPI Inflation 3.8% y-o-y (consensus 4.1%) in Apr-24

- Philippines CPI inflation in April 2024 registered at 3.8% y-o-y, below the consensus forecast of 4.1% and showing a moderation compared to the previous period.
- The current CPI inflation rate represents the highest growth rate since December 2023 and is 0.72 percentage points below the one-year average, indicating relatively lower price growth in the economy. Additionally, it is 1.75 percentage points below the long-run average, signaling a significant deviation from the historical trend.