Inflation Update: Storm-slicked price increases

Philippine headline inflation accelerated to 1.5% year-on-year (YoY) in August.

Despite an expected acceleration in inflation in the remaining months of the year, the year-to-date figure provides enough room for full-year inflation to remain target-consistent.

Key points

• Year-to-date inflation remains at 1.7%, below the BSP’s 2.0 – 4.0% target for the full year.
• Core inflation, which excludes volatile food and energy items, quickened to 2.7% from 2.3% in the preceding month.
• The latest core inflation figure shows the realization of supply-side pressure driven by recent unfavorable weather conditions.

What’s next

• Metrobank revises its FY 2025 inflation forecast to 2.1% from the previous 2.0%
• Target-consistent inflation gives leeway for the central bank to cut the key policy rate again in