The Philippines takes a breather as inflation slows sharply in September

Thanks to subdued food and transport costs.

Policymakers in the Philippines can finally heave a sigh of relief after the country’s CPI decelerated sharply in September, following consecutive months of upward movement.

Headline inflation eased to 4.4% in September, after peaking at 4.9% in August. Food prices decelerated to 7.4% year-on-year in September from 8.3% in August.

According to HSBC, headline inflation is expected to be the same in October and slow sharply in November and December.

“The BSP's inflation target, however, will narrow in 2015 to 2-4% (from 3-5%). While headline inflation will likely stay on track in January and February, we expect it to spike from March 2015, prompting interest rate hikes,” noted HSBC.