Policy Shift From Philippine Central Bank?
In August, Philippines’ inflation rose above 6% for the first time in 9 years, which caused speculations about a policy tightening from country’s central bank. According to the Philippine Statistics Authority, consumer prices increased 6.4% comparing to 2017, exceeding all the projections in a Bloomberg survey.
Nestor Espenilla (central bank Governor) stated: “We will weigh the need for further monetary policy action,” and: “It is most critical at this point to restore inflation back to the target range soonest and securely anchor inflationary expectations.”
Espenilla also said the August numbers were “beyond the acceptable target range,” which led to the consideration of policy measures: “These warrant more decisive non-monetary measures,” the governor noted. Jose Vistan, research head at Manila-based AB Capital Securities Inc reaffirmed: “There’s a need for a further rate hike,” and:“It puts a lot of pressure on the Bangko Sentral ng Pilipinas to stay on the curve.”
Philippine stocks dropped 1.7% and marking about 3-week minimums. The peso was little changed at 53.55 per dollar. Inflation held at 4.8% in January to August.