The Philippines is grappling with a persistent surge in inflation, with the Philippine National Statistics Office revealing today that for the second consecutive month, inflation in the country has risen. This uptick can be attributed to increasing costs in the food and transportation sectors and is expected to prompt the Central Bank of the Philippines (BSP) to consider further interest rate hikes.
The Consumer Price Index (CPI), a key measure of inflation in consumer spending, surged to 6.1% in September. This surpassed analysts’ predictions of 5.3% and landed at the upper end of the projected range, in line with the Philippine Central Bank’s forecast of 5.3% to 6.1%.
The recent uptick in inflation brings the year-to-date average inflation rate to 6.6%, well above the central bank’s annual target range of 2% to 4%.
The core CPI, which excludes the volatile food and fuel categories, stood at 5.9% in September, showing a slight decrease from the 6.1% recorded in August.
Nicholas Mapa, Senior Economist at ING, anticipates that the Central Bank of the Philippines will soon opt for another round of interest rate increases in response to inflation exceeding expectations.
The Central Bank’s next monetary policy meeting is scheduled for November 16. In its two most recent meetings, the central bank chose to maintain interest rates. However, it has signaled a willingness to consider raising interest rates as a measure to bring inflation back within the target range for this year. This move is aimed at addressing the persistent upward pressure on prices and maintaining economic stability in the Philippines.