Philippine July inflation highest since 2018 | The Mighty 790 KFGO

By Neil Jerome Morales and Enrico Dela Cruz

MANILA (Reuters) -Philippine inflation accelerated to its quickest tempo in almost 4 years in July, authorities knowledge confirmed on Friday, sustaining strain on the central financial institution to additional tighten financial coverage at its Aug. 18 assembly.

The buyer worth index rose 6.4% in July from a yr earlier, pushed by larger transport and meals costs, the Philippine Statistics Authority mentioned.

The headline determine, the very best since October 2018, was above the 6.2% median forecast in a Reuters ballot and on the prime finish of the 5.6%-6.4% vary projected by the central financial institution.

Inflation in January-July averaged 4.7%, versus the central financial institution’s 2%-4% goal band.

The Bangko Sentral ng Pilipinas (BSP) has raised rates of interest by a complete of 125 foundation factors this yr, together with an off-cycle hike of 75 bps final month, becoming a member of friends around the globe in a scramble to curb inflation.

Whereas BSP Governor Felipe Medalla has dominated out one other hike exterior the common coverage assessment schedule, he has flagged the potential of an extra enhance of 25 bps or 50 bps on the assembly later this month.

“The BSP is ready to take all obligatory coverage motion to convey inflation towards a target-consistent path over the medium time period,” it mentioned following the information launch.

The BSP expects 2022 common inflation of 5%, exceeding its goal, boosted by persistent supply-side pressures. For 2023, nevertheless, it expects inflation to fall inside the 2-4% goal vary.

Medalla has additionally mentioned the BSP was ready to deal with dangers to inflation from a weak peso, which has stabilised following the central financial institution’s current hawkish tone.

Analysts mentioned the peso stays susceptible to depreciation given the Philippines’ present account deficit and the prospect of additional tightening by the U.S. Federal Reserve.

The coverage selections after the Aug. 18 assembly will rely upon knowledge, Medalla mentioned.

(Reporting by Neil Jerome Morales, Enrico Dela Cruz and Karen Lema; Enhancing by Ed Davies and Himani Sarkar)