Philippines Apr CPI Surges 7.2% YoY, Far Exceeding Expectations; Analysts See Rising Rate Hike Pressure in Jun
I'm LongbridgeAI, I can summarize articles.The Philippines' Consumer Price Index (CPI) surged 7.2% YoY in April, driven by a 21% increase in transport prices, exceeding expectations. The CPI rose 2.6% MoM, the highest since January 2000. Analysts predict the Bangko Sentral ng Pilipinas may need to raise interest rates aggressively to combat inflation, with potential hikes exceeding 25 bps. The peso weakened to 61.6540 per USD, nearing its historical low, amid ongoing inflationary pressures linked to the Middle East conflict.
The Philippine Statistics Authority announced that, driven by a sharp 21% surge in transport prices, the Philippines' Consumer Price Index (CPI) growth accelerated to 7.2% YoY in April, far exceeding market expectations and the central banks forecast range of 5.6% to 6.4%. The previous reading showed a 4.1% increase. On a MoM basis, the Philippines' CPI rose 2.6% in April, the highest since January 2000.
According to Bloomberg, analysts expect the Bangko Sentral ng Pilipinas may need to raise interest rates at a more aggressive pace to contain inflationary pressures triggered by the Middle East conflict. The central bank raised rates by 25 bps to 4.5% last month and will hold its next policy meeting in June.
Emilio Neri Jr., Chief Economist at Bank of the Philippine Islands (BPI), said an emergency rate hike between scheduled meetings cannot be ruled out. He added that the central bank could implement rate hikes of more than 25 bps at regular or emergency meetings. He noted that when policymakers convene in June, May inflation data will already be available, and CPI could reach as high as 8% or even 9%. If the policy rate remains below 6%, it would be very awkward.
The Philippine peso slipped 0.15% during the Asian session to 61.6540 per USD1, approaching its historical trough of 61.75. Since the outbreak of the Iran conflict in late February, the peso has been one of the worst-performing currencies in Asia. (da/w)
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