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Philippines CPI Inflation 3.4% y-o-y (consensus 3.1%) in Feb-24

- Philippines CPI inflation surpassed market expectations by rebounding to 3.4% year-on-year in February 2024.
- Although that is only the highest level since December 2023, it breaks a downtrend as it rises towards the core rate, which is where the upside news appeared.

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

• The BSP's decision to hold the policy rate at 6.5% is informed by an improved inflation forecast for 2024 and stable expectations for 2025, reflecting a period of cautious optimism and strategic pause in policy adjustments.
• Upside risks to inflation, notably from transport, electricity, and potential food price increases due to El Niño, are balanced by targeted government interventions, emphasizing the synergy between monetary and fiscal measures in managing inflation.
• The Monetary Board's ongoing assessment of economic growth and inflation dynamics supports a vigilant yet flexible approach to future policy decisions, ensuring readiness to adjust monetary settings in alignment with its price stability mandate.

Philippines CPI Inflation 2.8% y-o-y (consensus 3.1%) in Jan-24

- Philippines CPI inflation in January 2024 dropped by 1.1 percentage points to 2.8%, 0.3pp below the consensus forecast of 3.1%.
- Approximately a third of the downside news was in the core, which slowed by 0.6pp to 3.8% y-o-y.

Outlook 2024: The Year Of The Dragon #2

• For the past 18 months or so, there has been much talk of ‘peak China’ economically. As we enter the year of the dragon, should we add to this the semi-related question of whether we are also witnessing China’s diplomatic peak?

By Alastair Newton