Inflation in the Philippines quickened slightly in September but remained below the central bank’s target range, signaling continued progress in taming price pressures and offering policymakers room to ease interest rates further, according to data released by the Philippine Statistics Authority on Tuesday.
Consumer prices rose 1.7% year-on-year, up modestly from 1.5% in August, yet still under the Bangko Sentral ng Pilipinas (BSP) target band of 2% to 4%, Bloomberg reported. The figure also came in below the 1.9% median estimate in a Bloomberg News survey.
The BSP had projected September inflation to fall between 1.5% and 2.3%, reflecting the impact of easing food and energy prices. Still, the peso’s recent depreciation against the US dollar has raised concerns that imported inflation could pick up in the months ahead — potentially delaying the next round of monetary easing.
The central bank has two more policy meetings scheduled for this year — one this Thursday and another in December — but analysts expect policymakers to stay cautious in the near term to prevent currency instability.
Since August 2024, the BSP has cut its benchmark interest rate by a total of 150 basis points, including a quarter-point reduction in its overnight reverse repurchase rate to 5%, the lowest level in nearly three years. The easing cycle has been supported by declining rice prices and slowing overall demand pressures.
BSP Governor Eli Remolona has previously signaled that the central bank could consider one more rate cut if economic demand weakens further, though he has also hinted that the current cycle of monetary easing is nearing its end.
“The data gives the BSP breathing room,” said a Manila-based economist cited by Bloomberg. “But with the peso under pressure, they’re unlikely to move again this week.”
For now, the moderation in inflation suggests the Philippines’ disinflation trend remains intact, even as external headwinds and exchange-rate volatility could test the BSP’s resolve to support growth through additional rate reductions.
