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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

Philippines CPI Inflation 3.9% y-o-y (consensus 4.0%) in Dec-23

- Philippines CPI inflation declined to 3.9% year-on-year in December 2023, slightly below the consensus estimate of 4.0%, marking the lowest growth since February 2022.
- Core inflation remains slightly higher, highlighting persistent inflationary pressures in non-food and non-energy sectors.

Philippines Policy Rate 6.5% (consensus 6.5%) in Dec-23

• The BSP’s decision to maintain the policy rate at 6.5%, in line with consensus forecasts, is driven by a slight moderation in inflation forecasts and anchored expectations, reflecting an effective current policy stance in managing inflation risks.
• The Monetary Board's focus on sustaining economic growth, alongside a vigilant approach to inflation, underscores the balance between supporting economic resilience and maintaining price stability.
• The BSP’s readiness to adjust monetary policy settings in the future, depending on economic data and conditions, demonstrates a flexible and adaptive policy approach, ensuring responsiveness to both inflationary pressures and growth dynamics.

Philippines CPI Inflation 4.1% y-o-y (consensus 4.3) in Nov-23

- November 2023 CPI inflation in the Philippines stood at 4.1% year-on-year, 0.2pp below the consensus estimate, reaching the lowest rate since March 2022.
- Core inflation in November 2023 slowed to 4.7% year-on-year, indicating a similarly surprising moderation in inflation.