x Abu Dhabi, UAETuesday 25 July 2017

Yields, currency and rates fall in Philippines

What's Down: Philippine inflation slowed to a four-month low last month as food prices eased, increasing the scope for more interest-rate cuts to spur growth.

Philippine consumer prices last month rose 3.1 per cent from a year earlier, after a 3.6 per cent advance in September. Rouelle Umali / Reuters
Philippine consumer prices last month rose 3.1 per cent from a year earlier, after a 3.6 per cent advance in September. Rouelle Umali / Reuters

Philippine inflation slowed to a four-month low last month as food prices eased, increasing the scope for more interest-rate cuts to spur growth.

Consumer prices rose 3.1 per cent from a year earlier, after a 3.6 per cent advance in September, the National Statistics Office said in Manila. The median estimate in a Bloomberg survey of 16 economists was for a 3.5 per cent gain.

The governor of the central bank, Amando Tetangco, said last month that the bank had room to adjust borrowing costs to slow capital inflows and dampen currency gains as inflation remained tame.

The monetary authority cut the benchmark rate for a fourth time on October 25 to a record low 3.5 per cent after the economy grew 5.9 per cent in the second quarter, compared with a 6.3 per cent pace in the previous three months.

"We're looking at a general slowdown in inflation," said Eugenia Fabon Victorino, a Singapore-based economist at ANZ Banking Group, before the report. "Food prices have further eased and oil firms recently implemented rollbacks in pump, gasoline, and kerosene prices. The [central bank] will be cautious in its assessment."

The peso fell 0.1 per cent to 41.278 to the US dollar in early trading in Manila. The currency has gained more than 6 per cent this year, the biggest advance among the 11 most-traded Asian currencies tracked by Bloomberg.

The yield on sovereign notes due August 2018 slid to the lowest level in more than a year.

The central bank last month lowered its inflation forecast for this year to 3.3 per cent from 3.4 per cent, and its estimate for next year to 3.9 per cent from 4.1 per cent.

Food and non-alcoholic beverage costs rose 2.5 per cent last month from a year earlier, according to yesterday's release. Fuel, electricity and water prices climbed 4.5 per cent.

business@thenational.ae