Inflation in Philippines
Philippines - Inflation
Inflation slides within Central Bank’s target range in February
Consumer prices rose 0.2% over the previous month in February, matching January’s print. A sharp increase in alcoholic beverages and tobacco prices drove the uptick, while housing, water, electricity, gas, and other fuels prices also rose higher. Conversely, lower prices for food and non-alcoholic beverages offset the print.
Inflation receded to 3.8% in February from 4.4% in January, entering within the upper range of the Central Bank’s target band of 3.0% plus or minus 1.0 percentage point for the first time in one year. The deceleration was largely driven by a slowdown in food inflation. Meanwhile core inflation, which excludes volatile food and energy prices, eased to 3.9% in February from 4.4%, while annual average inflation was stable at 5.3% in February.
February’s report was an encouraging sign that supply-side pressures, largely due to the Tax Reforms for Acceleration and Inclusion (Train) laws, seen in 2018 are finally abating following last year’s monetary tightening from the BSP. In a statement following the press release, newly-appointed Central Bank Governor Ben Doikno commented “This gives us confidence that our medium term inflation forecast ranging 2-4% is appropriate”.
Along within moderating inflation, speculation about Governor Doikno’s pro-growth stance and fiscal policy background have markets penciling in a rate cut sooner than previously expected. While several FocusEconomics analysts expect a rate cut as early as this year, the majority of the panel continues to see the Bank on hold in 2019.
Commenting on the newly-appointed governor, ING senior economist Nicholas Mapa noted:
“With inflation back within the target range, this leaves the door wide open for newly appointed Governor Ben Diokno to think about easing off the brakes and looking to help support the growth side of the equation. Governor Diokno has spent his career on the fiscal side of the fence and has indicated that the "role of the BSP is to ensure sustained inclusive growth". With the price goal seemingly in hand, it may be time for the BSP to consider the possibility of reducing the reserve requirement ratio in the near term, and eventually lower policy rates to help chase the 7-8% growth target.”
Philippines Inflation Forecast
FocusEconomics Consensus Forecast panelists expect inflation to average 4.0% in 2019, which is down 0.2 percentage points from last month’s projection. For 2020, panelists see inflation of 3.7%.
Philippines - Inflation Data
|Inflation Rate (CPI, annual variation in %)||2.6||3.6||0.7||1.3||2.9|
5 years of economic forecasts for more than 30 economic indicators.
Philippines Inflation Chart
Source: National Statistics Office.
|Bond Yield||6.16||-4.11 %||Mar 11|
|Exchange Rate||52.13||0.02 %||Mar 11|
|Stock Market||7,709||0.66 %||Mar 11|
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March 15, 2019
Cash remittances from Overseas Filipino Workers (OFW) totaled USD 2.5 billion in January, which was a 4.4% increase from the same month a year prior, and an acceleration from the 3.9% rise registered in December (USD 2.8 billion). On a cumulative basis, cash transfers in the 12 months up to January totaled USD 29.0 billion, a notch up from December’s USD 28.9 billion. Robust cash remittances in January continued to be supported by strong inflows from the U.S.—the origin of over a third of all remittances—followed by Saudi Arabia, Singapore, and the UK. January’s result suggests Filipino household spending will likely remain solid in the first quarter of 2019.
March 12, 2019
Merchandise exports continued falling at the outset of 2019.
March 5, 2019
Consumer prices rose 0.2% over the previous month in February, matching January’s print.
March 1, 2019
The manufacturing Purchasing Managers’ Index (PMI), produced by Nikkei and IHS Markit, inched down to 51.9 points in February from 52.3 points in January, which marked a six-month low for the survey.
February 15, 2019
Cash remittances from Overseas Filipino Workers (OFW) rose to USD 2.8 billion in December, a 3.9% increase compared to the same month of the previous year.