Philippine inflation accelerates in July, cements rate hike expectations
Reuters
Published Aug 07, 2018 12:19AM ET
Philippine inflation accelerates in July, cements rate hike expectations
By Karen Lema
MANILA (Reuters) - Philippine annual inflation accelerated in July and moved further away from the central bank's comfort range, strengthening expectations for further policy tightening this week.
Inflation quickened to 5.7 percent in July, the fastest rise in over five years, due to higher food and transport costs, the National Economic Development Authority said.
It was higher than the 5.5 percent median forecast in a Reuters poll, and near the top end of the central bank's 5.1-5.8 percent estimate for the month.
Bangko Sentral ng Pilipinas Governor Nestor Espenilla signaled the uptick in inflation required a policy response, and the only question that needs to be answered is how strong should it be.
"We will consider all the latest data updates in determining the strength of our follow-through response in the upcoming policy meeting," Espenilla told reporters via mobile phone message shortly after the data was released.
July's inflation print marked the fifth straight month the rate has breached the central bank's 2-4 percent target for this year and next, leading some analysts to believe policymakers would deliver as much as a 50-basis-points rate hike on Thursday.
Espenilla said the central bank was sticking with its view that inflation will return to its target by 2019.
The central bank, which is due to meet on Aug. 9, raised its benchmark interest rate
"The BSP (central bank) still has to continue raising rates to assure consumers and the market that inflation is well anchored," Bank of the Philippine Islands economist Emilio Neri told news channel ANC.
The peso
The peso has lost 5.7 percent against the dollar this year, making it one of Asia's worst performing currencies.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.