Philippines Inflation April 2019


Philippines: Inflation hits Central Bank target in April

May 7, 2019

Consumer prices rose 0.25% over the previous month in April, following March’s flat print. The increase was largely driven by higher transport costs—mainly due to rising crude oil prices. Prices for alcoholic beverages and tobacco, and housing, water, electricity, gas, and other fuels also rose notably.

Inflation softened to 3.0% in April from 3.3% in March, hitting the midpoint of the Central Bank’s target band of 3.0% plus or minus 1.0 percentage point and marking an over one-year low. Core inflation, which excludes volatile food and energy prices, ticked down to 3.4% in April from 3.5% in March, while annual average inflation inched down to 5.1% in April from 5.2% in March.

April’s encouraging print, combined with a recent credit upgrade from S&P Global Ratings, will likely give the BSP additional ammunition to consider cutting the reserve requirement ratio (RRR)—at 18.0% one of the highest in the region—or the key policy rate at its next monetary policy meeting on 9 May. BSP Governor Diokno suggested in a recent interview his intention to lower the RRR, while a rate cut would be a matter of timing.

Philippines Inflation Forecast

FocusEconomics Consensus Forecast panelists expect inflation to average 3.4% in 2019, which is down 0.1 percentage points from last month’s projection. For 2020, panelists see average inflation of 3.5%.


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Philippines Inflation Chart

Philippines Inflation April 2019

Note: Annual and monthly variation of consumer price index in %.
Source: Central Bank of the Philippines (BSP) and FocusEconomics calculations.

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