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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.

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

• The BSP’s decision to maintain the policy rate at 6.5% reflects a strategic response to a modest uptick in inflation forecasts and the challenge of balancing inflation mitigation with economic growth, indicating a cautious yet proactive approach to monetary policy management.
• Despite the upside risks to inflation, particularly from supply-side pressures, the Monetary Board’s confidence in keeping inflation expectations anchored assumes the effectiveness of the current policy stance in maintaining inflationary stability.
• The BSP’s emphasis on economic growth prospects and its readiness to adapt policy settings in response to shifting economic and inflationary landscapes highlight a commitment to flexible and forward-looking monetary policy, ensuring price stability and sustained economic health.

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.