Archive

Philippines Policy Rate 6.25% (consensus 6.5%) in Aug-24

• The BSP's decision to cut the policy rate by 25 basis points to 6.25% defied consensus expectations. This strategic shift towards a less restrictive monetary policy responds to an improved inflation outlook.
• Domestic demand remains solid, and the economic environment is favourable, with strong GDP growth and declining unemployment.
• Future policy decisions will focus on balancing inflation risks with economic growth, with the BSP remaining vigilant and ready to adjust its stance based on evolving macroeconomic indicators.

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.