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Bangko Sentral Ng Pilipinas: Oct-23

• The BSP’s off-cycle rate hike, driven by elevated inflation projections and the emergence of second-round effects, reflects a proactive stance in pre-empting inflationary pressures and stabilizing the economic environment.
• A balanced view of risks, considering both domestic and global factors, underscores the Monetary Board's commitment to a holistic approach to risk management, demonstrating an understanding of the intricate dynamics influencing inflation.
• The decision to maintain tighter monetary policy settings until a sustained downward trend in inflation is evident, coupled with support for fiscal and non-monetary measures, highlights a strategic focus on balancing economic growth with inflation control, guided by a flexible, data-driven approach.

Philippines CPI Inflation 6.1% y-o-y (consensus 5.3%) in Sep-23

- Philippines CPI inflation surged to 6.1% in September 2023, the highest since April 2023, contrary to consensus expectations for stable pressures at 5.3%.
- Despite the increase, the inflation rate remains 0.81 percentage points below the one-year average, showcasing that previous progress towards price stability hasn't been fully reversed.

Philippines PMI Manufacturing 50.6 in Sep-23

- The Philippines PMI Manufacturing recorded a score of 50.6 in September 2023, indicating expansion in the sector and the highest level since July 2023.
- The improvement from the previous reading of 49.7 suggests a positive shift in the manufacturing sector's performance and signals an improving business environment. However, the latest PMI score remains 1.38 points below the one-year average.

Bangko Sentral Ng Pilipinas: Sep-23

• The Monetary Board's unsurprising decision to maintain the Target Reverse Repurchase Rate at 6.25% illustrates a balanced and cautious approach, considering elevated inflation, moderating core inflation, and subdued domestic economic activity, highlighting a focus on stable and predictable policy evolution.
• The impact of external supply-side factors such as weather disturbances and global crude oil prices on inflation projections underscores the need for comprehensive economic governance, incorporating both monetary and non-monetary interventions to achieve economic equilibrium.
• The BSP’s commitment to price stability and its readiness to adapt to emerging risks reflect a strong institutional resolve to maintain economic stability and sustain growth, reinforcing confidence in institutional economic stewardship.