Philippine Inflation Shows Some Progression, Suggesting Policy Tightening

Forex News

Philippine annual inflation pointed at acceleration in July, which caused speculations about a rate hike from country’s Central Bank. According to the National Economic Development Authority, inflation rose to 5.7% in July, marking the fastest pace in more than 5 years. The gain was due to increased food and transport costs. The forecast suggested 5.5% rise.

Nestor Espenilla (Bangko Sentral ng Pilipinas Governor) said: "We will consider all the latest data updates in determining the strength of our follow-through response in the upcoming policy meeting".

Philippine Central Bank, the so-called BSP executes a rate hike each May and June, trying to curb inflation and buoy the peso. Emilio Neri (Bank of the Philippine Islands economist) stated: "The BSP (central bank) still has to continue raising rates to assure consumers and the market that inflation is well anchored".

The peso has mildly dropped to 52.91 versus dollar. The PSI (main stock index) reduced 0.58%. In 2018, the peso fell 5.7% versus the greenback, which marked one of Asia's worst results in terms of currencies.