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UPDATE 1-Philippines September inflation slowest in more than 3 years

Published 10/04/2019, 09:37 AM
Updated 10/04/2019, 09:40 AM
UPDATE 1-Philippines September inflation slowest in more than 3 years

MANILA, Oct 4 (Reuters) - Philippine annual inflation slowed
more than expected in September because of lower food and
electricity costs, the statistics agency said on Friday, giving
the central bank room to ease monetary policy if needed.
Last month's headline inflation rate of 0.9% was the slowest
in more than three years. It was below the 1.1% forecast in a
Reuters poll and was within the central bank's 0.6% to 1.4%
forecast for the month. It brought the average inflation in the nine months to
September to 2.8%, well inside the central bank's 2%-4% target
for the year.
Inflation peaked at a near-decade high of 6.7% in September
and October last year. Overall prices have since eased, allowing
the central bank to start reversing some of last year's
175-basis points' worth of interest rate increases.
Last week, the central bank slashed its benchmark interest
rate PHCBIR=ECI for a third time this year to support a
slowing economy. It also reduced banks' reserve requirement
ratio by 100 basis points to boost credit growth. "Declining inflation trend would provide increased
flexibility in terms of greater leeway for any furthering easing
of local monetary policy," said Michael Ricafort, economist at
Rizal Commercial Banking Corp.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said on
Tuesday he remained confident 2019 growth would reach 6%, the
lower end of its 6-7% forecast, but acknowledged it might just
miss the mark.
He declined to say whether further easing would happen in
2019, saying it would depend on inflation rates which are
currently "under control".

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