Philippine inflation eases to 6.1% after successive rate hikes

PHILIPPINE inflation eased for the fourth straight month in August while staying above the central bank’s target, on slower increases in utility rates and food prices.

Consumer prices rose 6.1 per cent last month from a year earlier, the Philippine Statistics Authority said on Friday (Sep 4). That matched the median estimate in a Bloomberg News survey and compared with 6.2 per cent inflation in July.

The slower pace of inflation will be welcome news for the Bangko Sentral ng Pilipinas, which last week delivered its third successive quarter point rate hike and has signalled its readiness to tighten further. The central bank forecast August inflation in a range of 5.5 to 6.5 per cent.

Still, the latest inflation print remains well over the BSP’s 3 per cent target for the year.

Global and domestic headwinds resulted in the Philippines delivering the second-weakest growth and the fastest inflation among major South-east Asian economies in the second quarter, while its currency also became Asia’s worst-performer this year.

The South-east Asian economy imports more than 90 per cent of its oil needs from the Middle East, making it particularly vulnerable to supply disruptions and volatile price swings like those from the US war on Iran. BLOOMBERG