Economy
Inflation Update: Below target despite typhoons
Storm-fed supply pressure fueled a faster consumer price increase in September, but not by as much as expected
by Metrobank
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Consumer price rise quickened in September but came in slower than expected.
Philippine headline inflation accelerated to 1.7% year-on-year (YoY) in September. Year-to-date inflation remains unchanged at 1.7%, sitting below the Bangko Sentral ng Pilipinas’ (BSP) 2%-4% full year target.
Related article: Inflation Preview: Back within target in September
Key points
- ●Core inflation, which excludes volatile food and energy items, decelerated to 2.6% from 2.7% in August.
- ●Energy and food prices continued to drive headline inflation in September, partly offset by still muted rice prices.
- ●Transport, vegetable, meat, and fish prices pose upside risks to inflation in the coming months. Meanwhile, rice inflation is projected to pick up by December due to low base effects.
What’s next
- ●Metrobank cuts its inflation forecast for FY 2025 to 1.8%, even as we anticipate consumer price increase to pick up pace in the coming months.
- ●Target-consistent full-year inflation provides leeway for the BSP to further reduce its policy rate by another 25 basis points before year-end.
(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.) Download our report below.