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Philippines' November inflation slows to one-year low

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The consumer price index was up 3.7 per cent last month, its slowest rise since November 2013 and lower than the 4.0 per cent forecast by economists in a Reuters poll.

[MANILA] Philippine annual inflation slowed for the third straight month in November, bolstering expectations the central bank will leave interest rates on hold at next week's policy meeting and longer before resuming its tightening cycle.

The consumer price index was up 3.7 per cent last month, its slowest rise since November 2013 and lower than the 4.0 per cent forecast by economists in a Reuters poll.

Core inflation, which takes out volatile items, was 2.7 per cent from last year against a forecast of 2.9 per cent in the Reuters poll.

The central bank had expected annual inflation in November to be at 3.5-4.3 per cent.

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Data released on Nov 27 showed the Philippine economy slowed to its weakest pace in more than five years in the third quarter, hurt by a decline in public spending and farm output and signalling a longer-than-expected pause in the central bank's tightening cycle.

Following the release of third quarter GDP data, Bangko Sentral ng Pilipinas Governor Amando Tetangco said the central bank's current policy should help support economic activity, pointing to a generally manageable inflation outlook.

The latest money supply data showed M3 growth in October at its slowest in about one and a half years, after peaking at more than 30 per cent early this year.

Based on its October estimates, the central bank expects average inflation this year to reach 4.4 per cent, compared with the previous 4.5 per cent forecast, and 3.7 per cent in 2015 versus an earlier 3.8 per cent projection.

It wants to keep inflation between 3-5 per cent this year and 2-4 per cent next year.

REUTERS

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