USD/PhP: 43.85 (as of 12:00pm) PSEi: 4171.87 - 16.33
USD/JPY: 83.51 PFINC: 949.80 - 3.43
EUR/USD: 1.3647 BDO: 60.50 - 0.10
GBP/USD: 1.5814 BPI: 55.85 + 0.05
PDSTF3M: 4.1212 MBT: 72.45 - 1.15
Prices as of 12:00pm Source: Bloomberg, Reuters
Philippine Inflation Slows, Easing Pressure on Rates
By Max Estayo
Oct. 5 (Bloomberg) -- Philippine inflation slowed to a 10-
month low in September, giving the central bank room to keep its
benchmark interest rate at a record low.
Consumer prices increased 3.5 percent from a year earlier,
after a 4 percent gain in August, the National Statistics Office
in Manila said today. That’s slower than the median estimate of
4 percent in a Bloomberg News survey of 10 economists.
Bangko Sentral ng Pilipinas has kept its key rate unchanged
for more than a year, even as Thailand, Malaysia and India moved
to counter the threats of asset bubbles and rising prices.
Governor Amando Tetangco said Sept. 28 the country’s inflation
environment should “remain subdued during the policy horizon,
barring unforeseen or sudden events,” though the central bank
has sufficient flexibility to address any potential challenges.
“Inflation has had a surprising downside, giving the
central bank a bit of a leeway to hold rates much longer,”
Vishnu Varathan, an economist at Capital Economics (Asia) Pte in
Singapore, said before the report.
Policy makers will meet Oct. 7 to decide on the benchmark
rate, which has been held at 4 percent since July 2009.
Inflation may accelerate as the $160 billion Philippine
economy expands. Gross domestic product will probably grow about
6 percent or more this year, Finance Secretary Cesar Purisima
said last week.
The government is seeking investments for commuter railways,
airports and schools to bolster growth, which quickened to a
three-year high of 7.9 percent in the second quarter.
Food, beverage and tobacco costs rose 3.2 percent last
month from a year earlier. Fuel, electricity and water prices
climbed 11.8 percent, easing from 15.3 percent in August.
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
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