MANILA: Officials said on Friday ( May 5) that Philippine annual inflation was on track to reach the government’s 2 percent to 4 % target in the fourth quarter after it eased further in April due to lower food prices, establishing the case for halting interest rate hikes.
The consumer price index increased by 6.6 % in April from a year earlier, marking the slowest rate of growth since August, and it was below the Reuters poll’s forecast of 7.0 percent.
According to Finance Secretary Benjamin Diokno,” the most recent inflation figures indicate that we are on track to managing prices to within destination sometime in the third quarter, if never sooner.”
Analysts claimed that the Bangko Sentral ng Pilipinas ( BSP ) will delay raising interest rates at its meeting on May 18 due to slower inflation in April, despite the US Federal Reserve raising rates by 25 basis points this week.
According to Nicholas Mapa, an analyst at ING,” Today’s state increases the likelihood of a delay from the BSP at the May 18.”
Since last May, the BSP has increased interest rates by 425 foundation points to 6.25 percent in an effort to combat inflation.
The BSP would need another square of data before deciding to end its traveling period, according to Robert Dan Roces, chief analyst at Security Bank, who added that he also anticipated the central bank may keep rates on hold this month.
Core inflation, which excludes volatile food and fuel items, decreased slightly from March’s 8.0 percent to 7.9 %.
The BSP said last month that it might halt its 10-month tightening cycle if prices slowed further in April. It had previously projected April prices at 6.3 percent to 7.1 percent.
The BSP stated on Friday that it” remains dedicated to adjusting the monetary policy position as necessary to prevent the further escalation of price pressure as well as the appearance of extra second-order results.”
Given the possibility of an El Nino wind design and the rise of the African pigs flu, upside risks to inflation persisted, according to a statement from the financial planning agency.