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UPDATE 1-Philippines inflation slows for first time in 4 months in Feb

Published 03/05/2020, 09:39 AM
Updated 03/05/2020, 09:40 AM
UPDATE 1-Philippines inflation slows for first time in 4 months in Feb

* Feb inflation slows to 2.6% vs 2.9% in Jan
* Slower inflation due to lower food, transport costs
* C.bank says no off-cycle policy rate cut

MANILA, March 5 (Reuters) - Philippine annual inflation
slowed for the first time in four months in February as the
costs of food, transport and utilities eased, the statistics
agency said on Thursday.
Consumer prices rose to 2.6% in February from a year earlier
after a 2.9% rise in the previous month. Analysts in a Reuters
poll had expected a 3.0% rise.
Core inflation, which strips out volatile food and fuel
items, eased to 3.2% in February from 3.3% in January.
A decline in prices would allow the central bank, if needed,
to cut interest rates PHCBIR=ECI beyond what Governor Benjamin
Diokno had committed, to protect the Philippine economy from the
fallout from the coronavirus outbreak.
While Diokno remained committed to cutting interest rates by
another 25 basis points this year after the quarter-point cut in
February, he has said that he will consider more cuts in rates
and banks' required reserves if conditions called for them.
Diokno said on Wednesday there will no off-cycle policy rate
cut and that the Federal Reserve's decision to cut rates, the
impact of coronavirus, and the February inflation rate would all
be tabled at the central bank's March 19 policy meeting.
The central bank previously estimated the virus outbreak
could shave up to 0.2 percentage points off first-quarter growth
and 0.4 percentage points off second-quarter growth, but the
forecasts were being reviewed.
Diokno said growth could be at 6.0% this year, below the
government's 6.5%-7.5% target for the year.

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