Philippines inflation hits 4% - rates may rise from March

February 6, 2018

MANILA – with headline inflation in the Philippines surging to 4.0% - higher even than its above-consensus forecast of 3.7% - ANZ Bank is tipping that Bangko Sentral ng Pilipinas will embark on policy tightening commencing with a 25bps hike in March.

“The confluence of the tax reform, rising Brent prices and a weak PHP underlie this (inflation) surge,” ANZ says.

“The accompanying surge in core inflation implies that entrenched strength in domestic demand has amplified the effects of the tax reform.

“At this rate, we expect headline inflation to breach the upper bound of the central bank’s inflation target range of 2-4%.” (ATI).