Slow rate cuts and quicker growth lie ahead for Philippines

Against a backdrop of slowing inflation and measured monetary easing by the Bangko Sentral ng Pilipinas, the Philippine economy should pick up pace this quarter and the following quarters.

The annual consumer-price increase slowed to an over four-year low in September. Food costs are expected to continue weighing down on inflation, while the Philippines still has space to absorb recent oil-price hikes before direct inflationary pressure materializes.

Monetary authorities cut the policy rate by another 25 basis points on October 16. Barring significant curveballs, similar decreases at succeeding rate-setting meetings are in the cards. Eyes should be locked on geopolitical tensions in the Middle East stoking oil-price volatility and unfavorable weather conditions disrupting food supply.

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