MANILA: Philippine annual inflation quickened for a fourth straight month in May due largely to the faster pace of increases in housing, utility and transport costs, the statistics agency said on Wednesday (Jun 5).
The consumer price index rose 3.9 per cent in May from 3.8 per cent the previous month, marking the fastest rise since November 2023, bringing the five-month average inflation to 3.5 per cent, well inside the central bank’s 2.0-4.0 per cent target for the year.
Economists in a Reuters poll had forecast annual inflation at 4.0 per cent.
The Bangko Sentral ng Pilipinas (BSP) said last month’s data was consistent with its expectations that inflation could accelerate over the near term due to the impact of adverse weather conditions on farm output.
Core inflation, which strips out volatile food and energy prices, eased to 3.1 per cent in May from 3.2 per cent the prior month.
BSP Governor Eli Remolona reiterated on Tuesday the benchmark policy rate, currently at a 17-year high of 6.50 per cent, could be cut before the US Federal Reserve starts it easing cycle.
But Ruben Carlo Asuncion, chief economist at Manila-based Union Bank, believed the BSP would still prefer to wait for the Fed to move before it does to prevent the peso, down more than 5 per cent against the dollar so far this year, from weakening too much.
“They may have to prioritise interest rate differentials over the speed of cuts,” Asuncion said in a phone message.
The Philippine central bank, which kept its benchmark rate steady at its last five meetings, has said it was looking to cut rates by 25 basis points as early as August and by another 25 basis points in the fourth quarter.
Its next meeting is on Jun 27.
From: channelnewsasia
Business News
