Philippine Inflation Rate Holds Near Eight-Month High
Philippine inflation held near an eight-month high in January as oil and food costs rose, supporting the central bank’s decision to start unwinding stimulus measures.
Consumer prices increased 4.3 percent from a year earlier, after a 4.4 percent gain in December, the National Statistics Office said in Manila today. That compares with the median forecast for a 4.9 percent increase in a Bloomberg News survey of 12 economists.
The central bank remains “watchful of price signals,” Deputy Governor Diwa Guinigundo said today. “Our monetary policy stance was also validated to be supportive of price stability while accommodating economic growth.”
Bangko Sentral ng Pilipinas last week raised the rediscounting rate, one of the rates it charges lenders for borrowing money from the central bank, by half a percentage point to 4 percent. The Philippines imports almost all its oil and the price of the commodity has risen more than 70 percent in the past 12 months.
Benchmark three-year bond yields climbed, ending three days of declines. The peso slid 0.7 percent against the dollar.
“People think it’s just a one-time blip,” Yvette Marquez, who helps manage the equivalent of $9.8 billion in assets at BPI Asset Management in Manila, said of the moderation in consumer- price gains. “We still expect inflation to rise, although it will be a tempered rise.”
Benchmark Rate
The central bank left its benchmark interest rate unchanged at 4 percent for a fifth straight meeting on Jan. 28, the lowest level since central bank data started in 1990. Policy makers raised the inflation forecast for this year to 4.7 percent from 4 percent.
Philippine economic growth accelerated to 1.8 percent last quarter, the fastest pace in a year. Expansion slowed to a decade-low 0.4 percent in the third quarter.
Food, beverage and tobacco costs rose 4.3 percent last month. Fuel, electricity and water prices climbed 9.2 percent.
“Current monetary settings are appropriate,” Bangko Sentral ng Pilipinas Deputy Governor Armando Suratos said in a mobile-phone text message after the inflation report. The central bank will watch for “any possible build-up in inflationary pressures emanating from demand and supply forces and preemptively revisit and calibrate policy settings when warranted,” he said.
Filed under: economics by TheDoor