MANILA: Philippine inflation quickened in July to the fastest pace in nine months on higher utility prices as the central bank prepares to pivot to monetary easing as early as next week.
Consumer prices rose 4.4% on-year last month, the statistics agency said Tuesday (Aug 6), exceeding the 4.1% median forecast of economist in a Bloomberg News survey and surpassing the Bangko Sentral ng Pilipinas’ target for the first time this year.
While the latest data came before a well-telegraphed potential rate cut at the BSP’s Aug 15 meeting, policymakers largely expected the target breach, having estimated July inflation to come between 4% and 4.8% on higher power and food costs.
The uptick is unlikely to deter the Philippines from lowering borrowing costs from a 17-year-high as early as next week’s meeting. The global stock market rout that fueled bets that the Federal Reserve will pivot to easing soon gives policymakers more scope to deliver rate cuts.
BSP Governor Eli Remolona said last week that inflation may have already peaked in July, making an August rate cut "still a possibility.”
The Philippines’ lower rice tariffs are also expected to help tame food inflation starting this month.
Rice inflation came in at 20.9% compared with 22.5% in June, showing that price pressures from the staple grain continued to ease. - Bloomberg
