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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the recently published inflation figures in the Philippines.

Key Quotes

“Headline inflation moderated for the first time in four months to 2.6% y/y in Feb (from 2.9% y/y in Jan). This was against our estimate and Bloomberg consensus of a rise to 3.0%. The unexpected slowdown in Feb inflation was thanks to lower prices of food, fuel and electricity.”

For the rest of the year, inflation expectation will likely remain in check and well within the central bank’s target range of 2.0%-4.0% even though recent external events and lingering domestic policy changes have posed upside risks to the inflation outlook. The key upside risks include petitions for electricity rates and transport fare adjustments; as well as potential impact of recent weather disturbances and the COVID-19 outbreak on domestic food prices. We maintain our 2020 full-year inflation target at 3.0% (BSP’s forecast: 3.0%).”