Philippines: Inflation dropped more than expected in October – UOB
UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the latest inflation figures in the Philippines.
Key Takeaways
The Philippine’s headline inflation eased to 4.9% y/y in Oct (from +6.1% in Sep), slower than our estimate (5.5%) and Bloomberg consensus (5.6%). This was largely thanks to a smaller gain in prices of food, fuels and major services components (including passenger transport services, health and restaurants & accommodation services) amid year-ago high base effects.
Although consumer price inflation is expected to continue its downtrend, but it will likely to stay above the central bank’s upper bound target range of 4.0% in the remaining two months of this year. Headline inflation will only return to BSP’s 2.0%-4.0% target range in 1Q24 with risks remaining tilted to the upside. Hence, we maintain our full-year inflation outlook at 6.0% for 2023 (BSP est: 5.8%, 2022: 5.8%) and 3.5% for 2024 (BSP est: 3.5%). Volatile global commodity prices and currency fluctuation are still wildcards to the inflation outlook going into next year, together with potential changes in domestic price policy and adverse weather conditions.
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
