(Bloomberg) — Inflation in the Philippines accelerated for the third straight month in April, but continued tightness in food supplies kept prices under pressure, with the central bank keeping key policy interest rates at 17-year highs. there's a possibility that.
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Consumer prices rose 3.8% last month from a year earlier, according to statistics released by the government on Tuesday. That was slower than the median 4.1% rise estimated by economists in a Bloomberg survey. Rice inflation slowed for the first time in six months, to 23.9% from 24.4% in March.
The latest print is in line with the Pilipinas Central Bureau's “expectation that inflation may temporarily accelerate beyond the target range in the next two quarters due to the impact of adverse weather conditions on the country's agricultural production.” , said the central newspaper. the bank said in a statement.
Still, the BSP said it expects average inflation to return to its target of 2% to 4% this year and next. April's figure was within the central bank's expected range of 3.5% to 4.3%.
BSP Governor Eli Lemolona warned last month that there was a growing risk that inflation would hit the central bank's target for the third consecutive year in 2024. Sustained price pressures are building the case for the central bank to keep its key interest rate unchanged at 6.5% at next week's meeting. And the switch to monetary easing will probably be postponed until next year.
Read more: Philippines more likely to cut interest rates in 2025 due to inflation risks
Economic Planning Secretary Arsenio Balisacan said the shift from El Niño to La Niña could further increase the strain on the Philippines' food supply. “We are taking comprehensive measures to ensure food security amid geopolitical concerns and worsening weather patterns due to climate change,” he said in a statement.
La Niña tends to bring rain to some parts of Asia and usually occurs after an El Niño dry event.
“Our actions aim to promote local production and prepare for any challenges in food supply and price increases,” Balisakan added.
The central bank said its next monetary policy meeting on May 16 will take into account first-quarter gross domestic product (GDP) data to be released on Thursday and the latest inflation rates.
Rizal Commercial Banking Corp. Chief Economist Michael Ricafort said the slower-than-expected inflation rate “bodes well and will still support the view that local policy rates will remain stable” at next week's meeting. ” he said.
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–With assistance from Manolo Serapio Jr., Cliff Venzon, and Tomoko Sato.
(Updates overall details.)
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