, Philippines

Philippines' inflation spiked to its highest since 2011

Rates hit 4.5% yoy.

According to DBS, May CPI inflation surged to 4.5% YoY, highest since late 2011. Food inflation continues to be the main driver, as it came in at a 5-year high of 6.7% YoY.

The authorities have warned that a prolonged dry spell may sustain the upward pressure on food prices going forward. The secondary impact from higher food prices will put some pressure on prices across the board, maintaining the overall upward trend in CPI inflation.

Here's more from DBS:

At the current pace of growth, there is a good chance CPI inflation may touch 5% YoY in 3Q. That will only widen the differential between inflation and policy rate even further.

While it may be temporary, it is still likely to trigger a reaction from the central bank. The disappointing 1Q GDP print last week may be a factor that pushes the central bank to delay further policy tightening.

But domestic demand remains relatively strong, particularly on the investment front, and upcoming data will continue to support this view.

Following the adjustment done to the reserve requirement rate in the two previous policy meetings, expect the BSP to adjust its key policy rate higher going forward. Look for a total of 50bps rate hikes in 2H14.

Follow the link for more news on

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!