UPDATE 1 -Philippines inflation slows to near 3-yr low in August

* Aug CPI at 1.7%, below expectation
* Aug CPI lowest in nearly three years
* Slower inflation cements rate cut views

MANILA, Sept 5 (Reuters) - Philippine inflation slowed more
than expected in August due to base effects and lower food and
utility prices, cementing expectations for a third interest rate
cut this year.
The consumer price index (CPI) PHCPI=ECI rose 1.7% in
August from a year earlier, the statistics agency said on
Thursday, the weakest pace in nearly three years and below the
1.8% forecast in a Reuters poll. The data brought year-to-date inflation to 3.0%, which was
well within the central bank's 2%-4% target for the year.
Core inflation PHCPXY=ECI , which strips out volatile food
and fuel items, edged down to 2.9% in August from 3.2% in July.
Food and non-alcoholic beverages, which make up nearly
two-fifths of the overall basket used to calculate inflation,
rose at a slower annual pace of 0.6% compared with 1.9% in July.
Price rises for housing, water, electricity, gas, and other
fuel also eased to 1.8% from the previous month's 2.2%.
Slowing inflation allowed the central bank to cut rates
twice by a total of 50 basis points in May and August to give
the economy a lift and buffer it from the fallout from the
U.S.-China trade war.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno has
flagged a further quarter-point interest rate reduction before
the end of 2019 to shore up economic growth, which slipped to
its weakest in 17 quarters in April-June. “We expect the governor to deliver on his pledge and cut
policy rates by an additional 25 basis points at the 26
September meeting,” said ING economist Nicholas Mapa.
In a mobile phone text message, Diokno said the latest
inflation reading "is excellent news indeed. This gives us more
confidence that average inflation would be in the neighbourhood
of 2% in Q3 before it would increase slightly in Q4."
BSP raised the rates by a total of 175 basis points last
year to rein in inflation, which peaked at a near-decade high of
6.7% in September and October.
Inflation is seen to average 2.6% this year and 2.9% next
year, the central bank has said, well within its target of 2%-4%
for both years.