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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.

Philippines industrial production 5.71% y-o-y in Jul-23

- Industrial production in the Philippines shows promising growth with a year-on-year increase of 5.71% in July 2023, the highest since May 2023.
- Despite the recent improvement, industrial production remains below both the one-year average and the long-run average, suggesting ongoing challenges for the sector. Additionally, the trade deficit of -3.92 billion in June 2023 points to an imbalance in the country's trade.

Philippines CPI inflation 5.33% y-o-y (consensus 4.9) in Aug-23

- Philippines CPI inflation in August 2023 exceeded expectations, reaching 5.33% y-o-y, signaling increased price levels during this period.
- The core CPI inflation rate of 6.15% y-o-y suggests that underlying inflationary pressures may be a concern, highlighting the need for careful monitoring of price stability.

Philippines PMI manufacturing 49.7 in Aug-23

- The Philippines' PMI manufacturing posted a contraction with a reading of 49.7 in August 2023, the lowest level since August 2021, and 2.48 points below the one-year average.
- The decline in manufacturing activity could be attributed to negative GDP growth in Q2-23, a trade deficit of -3.92 billion in June 2023, and industrial production growth of only 3.92% year-on-year in the same month.