Free Trial

Inflation Quickens On Higher Food And Transportation Costs


Spot USD/PHP trades +0.030 at PHP52.903 as we type, with bulls looking to take out yesterday's high of PHP52.970 before targeting Jan 22, 2019 high of PHP53.040. Bears need a fall below the PHP52.500 to get some reprieve.

  • USD/PHP 1-month NDF last +0.010 at PHP53.130. Bulls keep an eye on yesterday's high of PHP53.280, bears look for losses towards May 30 low of PHP52.230.
  • Consumer prices quickened to +5.4% Y/Y in May from +4.9% recorded in April, matching consensus forecast and reaching the fastest pace since November 2018. Inflation in the capital region rose to +4.7% Y/Y from +4.4% prior. The PSA observed that inflation accelerated "primarily due to the higher annual growths in the food and non-alcoholic beverages index at 4.9 percent, and transport index at 14.6 percent."
  • BSP Gov Diokno said CPI is expected to settle above the +2.0-4.0% Y/Y target range this year, while risks lean to the upside for both 2022 and 2023. He noted that supply chain disruptions warrant closer monitoring, while domestic activity has gained stronger traction. Further policy action from Bangko Sentral will remain data dependent, with policymakers set to review price developments ahead of their June 23 meeting.
  • Philippine Statistics Authority will publish trade balance & jobs data on Thursday and Friday respectively.

Fig. 1: Philippines CPI vs. CPI Food and Non-Alcoholic Beverages Y/Y (%)

Source: MNI -= Market News/Bloomberg

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.