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Headline inflation softened to 2.5% y/y in March. Transport prices will likely remain a drag on inflation in the coming months amid lower global oil prices, economists at ANZ Bank inform. USD/PHP is trading at 50.6855.

Key quotes

“Headline inflation decreased by 0.1% m/m in March due to a 0.3% m/m and 1.8% m/m decline in ‘Food and beverages’ and ‘Transport’ prices, respectively.”

“Core inflation eased to 3.0% y/y in February from 3.2% y/y previously.”

“We expect inflation to average 1.9% through the year, a touch below the BSP’s 2-4% target band.”

“We still expect the Bangko Sentral ng Pilipinas (BSP) to cut the policy rate by 25bps to 3% at its May meeting.”