Philippines Inflation (PPI, ann. var. %, aop)

Inflation in Philippines

Inflation declines to lowest level since August 2022 in April

Inflation fell to 6.6% in April below March’s 7.6%. April’s reading represented the weakest inflation rate since August 2022. Looking at the details of the release, prices for food and non-alcoholic beverages increased at a slower pace in April. Housing and utilities price growth also softened. Moreover, prices for transport grew at a more subdued pace. Meanwhile, prices for clothing and footwear were broadly stable from the previous month’s reading

Nevertheless, annual average inflation ticked up to 7.2% in April (March: 7.1%).

Lastly, consumer prices fell a seasonally adjusted 0.03% from the previous month in April, broadly stable from March’s marginal fall. April’s result marked the lowest reading since August 2020.

Commenting on the outlook, Nicholas Mapa, senior economist at ING, said:

“BSP Governor Medalla recently indicated that he would be open to a pause at the next policy meeting should inflation slow further or if prices fall.  Today’s report increases the chances of a pause from the BSP at the 18 May meeting after month-over-month inflation was negative for a second month. Slowing inflation and a relatively stable currency could be enough to convince Governor Medalla to bring his recent tightening cycle to an end.”