The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
DOWNLOAD
View all Reports
Metrobank.com.ph Contact Us
Follow us on our platforms.

How may we help you?

TOP SEARCHES
  • Where to put my investments
  • Reports about the pandemic and economy
  • Metrobank
  • Webinars
  • Economy
TRENDING ARTICLES
  • Investing for Beginners: Following your PATH
  • On government debt thresholds: How much is too much?
  • Philippines Stock Market Outlook for 2022
  • No Relief from Deficit Spending Yet

Login

Access Exclusive Content
Login to Wealth Manager
Visit us at metrobank.com.ph Contact Us
Access Exclusive Content Login to Wealth Manager
Search
The Gist
News and Features
Global Philippines Fine Living
Insights
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
Webinars
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
Downloads
Buildings in the Makati Central Business District
Economic Updates
Monthly Recap: BSP to outpace the Fed in rate cuts 
May 29, 2025 DOWNLOAD
economy-ss-9
Economic Updates
Quarterly Economic Growth Release: 5.4% Q12025
May 8, 2025 DOWNLOAD
investment-ss-3
Economic Updates
Policy rate views: Uncertainty stalls cuts
May 8, 2025 DOWNLOAD
View all Reports
BusinessWorld 3 MIN READ

Inflation may remain high until Q3

February 14, 2023By BusinessWorld
Related Articles
NG debt hits record PHP 16.63 trillion April 2, 2025 PH stocks slump as Fitch downgrades US rating August 3, 2023 Debt yields up on Fed minutes May 27, 2024

HEADLINE INFLATION is likely to peak in February or March, which may prompt the Bangko Sentral ng Pilipinas (BSP) to continue tightening until May, ANZ Research said.

In a note on Tuesday, ANZ Research Chief Economist for Southeast Asia and India Sanjay Mathur and economist Debalika Sarkar said inflation could “accelerate further” and peak either in February or March.

“Even if inflation starts to descend from its peak, it will remain at elevated levels in the second quarter and third quarter. Any meaningful decline is only possible when domestic demand weakens and favorable base effects kick in,” ANZ said.

Headline inflation is also expected to return to within the BSP’s 2-4% target range only in the fourth quarter, it added.

ANZ revised its Philippine inflation forecast to 5.1% this year, from 4.3% previously. This is higher than the BSP’s 4.5% projection for 2023.

The consumer price index (CPI) quickened to 8.7% in January from the 8.1% in December, marking the highest in 14 years or since the 9.1% in November 2008.   

“Food inflation may continue to rise at least until February 2023, driven by La Niña events. The Philippine government’s official weather forecaster expects the weather conditions to improve from February onwards, but any favorable impact on food prices may only be evident after a few months’ lag,” ANZ said.

Food inflation rose to 11.2% in January from 10.6% a month ago, which was the fastest since the 11.3% in March 2009. This as prices of food items such as vegetables, eggs, and sugar sharply rose due to supply issues and weather disturbances.

ANZ noted food prices in the Philippines continued to climb in January, “in contrast with global and regional trends.”

“The continuous climb in services inflation is another source of concern. Unless pent-up demand for services retreats, it is unlikely that services CPI will stabilize,” it said.

ANZ noted the recent hike in water rates is estimated to contribute an additional 10 basis points (bps) to inflation this year.

Metro Manila’s two main water concessionaires began implementing higher rates in January. Manila Water raised rates by P8.04 per cubic meter, while Maynilad hiked rates by P3.29 per cubic meter.     

“After factoring in the current direction of inflation and all upside risks, we believe that the central bank will need to extend its tightening cycle to May 2023,” ANZ said.   

ANZ expects the BSP to raise borrowing costs by another 50 bps at its Thursday meeting, followed by two 25-bp hikes each at the March 23 and May 18 meetings.

“This takes our overnight reverse repurchase forecast to 6.50% (previously 6.00%) in this cycle. Combined with our inflation forecast, this translates into a real policy rate of 1.4% — signaling further room for monetary policy tightening if inflation remains more stubborn than anticipated,” it added.   

In a BusinessWorld poll conducted last week, the BSP is widely expected to raise borrowing costs on Thursday, with a slim majority of nine analysts forecasting a 50-bp rate increase, while eight analysts anticipate a 25-bp increase.   

The BSP raised interest rates by 350 bps since May 2022 as it sought to curb inflation. This brought the benchmark rate to a 14-year high of 5.5% last year.

BSP Governor Felipe M. Medalla last month said the central bank is ready to adjust policy stance as necessary “to keep further second-round effects at bay and prevent inflation expectations from becoming disanchored.” 

While not ruling out another supply shock, Mr. Medalla said January inflation was most likely the peak.

January inflation was above the BSP’s forecast range of 7.5-8.3%. It also marked the 10th consecutive month inflation was above the BSP’s 2-4% target range. — Keisha B. Ta-asan

This article originally appeared on bworldonline.com

Read More Articles About:
Worldwide News Philippine News Rates & Bonds Equities Economy Investment Tips Fine Living

You are leaving Metrobank Wealth Insights

Please be aware that the external site policies may differ from our website Terms And Conditions and Privacy Policy. The next site will be opened in a new browser window or tab.

Cancel Proceed
Get in Touch

For inquiries, please call our Metrobank Contact Center at (02) 88-700-700 (domestic toll-free 1-800-1888-5775) or send an e-mail to customercare@metrobank.com.ph

Metrobank is regulated by the Bangko Sentral ng Pilipinas
Website: https://www.bsp.gov.ph

Quick Links
The Gist Webinars Wealth Manager Explainers
Markets
Currencies Rates & Bonds Equities Economy
Wealth
Investment Tips Fine Living Retirement
Portfolio Picks
Bonds Stocks
Others
Contact Us Privacy Statement Terms of Use
© 2025 Metrobank. All rights reserved.

Read this content. Log in or sign up.

​If you are an investor with us, log in first to your Metrobank Wealth Manager account. ​

If you are not yet a client, we can help you by clicking the SIGN UP button. ​

Login Sign Up