Philippines central bank likely to adopt final rate hike of 25 bps at December meeting, says ANZ Research

The central bank of Philippines is expected to adopt a final rate hike of 25 basis points to 4.75 percent at their December monetary policy meeting, according to the latest report from ANZ Research.

At 6.7 percent y/y in October, headline CPI inflation remained unchanged from last month. However, excluding rice, inflation eased to 6.3 percent y/y in October. On this measure, this is the first such easing after 11 months.

By contrast, core inflation ticked up to 4.9 percent from 4.7 percent y/y prior, the highest since April 2009. On a sequential basis, the CPI index increased by 0.3 percent m/m in October. This marks the slowest pace of increase in four months.

Food prices increased by 0.1 percent m/m in October from 1.8 percent m/m in September. Slower food prices have eased in response to the government’s efforts to augment domestic supply through imports. Barring healthcare costs, other components of CPI basket either eased or remained stable during the month.

"We now think that inflation has peaked. However, bringing inflation back to BSP’s target range of 2-4 percent will nonetheless, require more policy response in our view," the report added.