Philippine headline inflation decelerates in November, BSP likely to stand pat in December

Philippine headline inflation came in below consensus expectations in November. On a year-on-year basis, the consumer price inflation eased to 6 percent. Even if core rate rose in year-on-year terms, the rate of rise in sequential terms was stable at 0.3 percent sequentially.

The headline inflation, on a sequential basis, dropped 0.2 percent, marking the first such fall in 17 months. However, the deceleration in prices was tilted towards a few categories. Food prices dropped 0.7 percent sequentially in November. Utility prices dropped 0.1 percent sequentially but the rate of rise in transportation costs eased to 0.6 percent sequentially in November from 0.9 percent in the prior month. The other components of the CPI basket either rose or came in stable in November.

The latest data strengthens the view that inflation has peaked in the Philippines, noted ANZ in a research report. Inflation is likely to ease in months ahead. The recent decline in global crude oil prices and the possible passage of the rice importation bill also augur well for the outlook of inflation.

“The above factors should allow the BSP to keep policy rates steady at its next meeting on 13 December”, added ANZ.