Philippines’ headline inflation remained well above the central bank’s target in August, strengthening the case for policy makers to continue raising interest rates when they meet later this month.
(Bloomberg) — Philippines’ headline inflation remained well above the central bank’s target in August, strengthening the case for policy makers to continue raising interest rates when they meet later this month.
Consumer prices rose 6.3% in August, slower than July’s 6.4% and the first deceleration since January, government data compiled by Bloomberg showed. Still, it is nowhere closer to the central bank’s 2%-4% goal.
Bangko Sentral ng Pilipinas, which has this year raised the key rate by 175 basis points in four moves to curb price gains and support the peso, said it is prepared to “take further policy actions to bring inflation toward a target-consistent path over the medium term.” While CPI continues to be driven by supply shocks, there is evidence of “broadening price pressures,” the bank said in a statement Tuesday.
Core inflation — which strips out volatile food and energy costs — quickened to 4.6% last month compared with 3.9% in July, according to the statistics authority.
What Bloomberg Economics Says…
“With core inflation jumping well above 4% and the peso adding to price pressures, another 50-basis-points rate hike can’t be ruled out”
— Tamara Mast Henderson, Asean economist
To read the full note, click here
Policy makers are scheduled to review rates on Sept. 22.
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