June Inflation Slightly Lower Than Expected, Adding To BSP Easing Risks

June CPI was weaker than expected in terms of the headline results. The m/m outcome was flat, versus +0.2% forecast, while the y/y print was 3.7%, against a 3.9% expectation, which was also the prior outcome. This keeps the headline CPI sub the upper end of the BSP's 2-4% target range. We haven't breached this level since the start of the year.

• Th flat headline in m/m terms reflected drags from housing/utility (-1.2% m/m), along with transport (-0.3%m/m). Food rose 0.6% m/m, as the main positive. Other sub categories were up 0.1-0.2% in m/m terms.
• In y/y terms, interestingly we had 11 out of the 12 sub categories record slower or the same y/y gains versus the June outcome. Only food ticked higher to 6.1% y/y. Restaurants at +5.1% y/y, is the only other sub index above the BSP's 2-4% target. Rice inflation was 22.5% y/y, versus 23% seen in May.
• Core CPI was steady at 3.1% y/y, close to the midpoint of the target band.
• We still get another inflation update ahead of the next BSP policy meeting (15th August), with the July print due on August the 6th.
• Still, today's result will add to the case for a BSP easing, which may come as early as the August meeting.