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Inflation cools further in August, near 3-year low

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ABS-CBN News

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2019/news/09/05/rice.jpg"/><figcaption>Rice retailers tend to their stalls at the Libertad market in Pasay City. <em>Jonathan Cellona, ABS-CBN News/file</em></figcaption></figure></div><p>MANILA (UPDATE) — Inflation cooled further in August to its slowest in nearly three years, official data released Thursday showed, giving the central bank room for further policy easing.</p><p>The consumer price index rose 1.7 percent in August from 2.4 percent in July. The median forecast of economists in a Bloomberg poll was 1.8 percent. It was also the first time in 3 years that inflation was below government&#x27;s target.</p><p>The August inflation figure is a &quot;positive development&quot; which the Monetary Board will &quot;take note of&quot; when it meets on Sept. 26, said BSP Governor Benjamin Diokno.</p><p>The BSP cut the benchmark lending rate by 25 basis points on Aug. 8 as inflation slowed and as economic growth slowed to a 4-year low in the April to June period due to the delayed passage of the 2019 budget.</p><p>Diokno said he was “confident” that average inflation would settle just near 2 percent in the third quarter before accelerating slightly during the last 3 months of the year.</p><figure class="op-interactive"><iframe src="https://www.youtube.com/embed/IMzOr5wBFnk?enablejsapi=1"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div><p>With cooling inflation, the situation is &quot;ripe&quot; for another interest rate cut, ING Bank Philippines senior economist Nicholas Mapa told ANC</p><p>While the slowdown is anticipated, inflation has room to cool further, Standard Chartered Asia economist Chidu Narayanan said in a separate ANC interview.</p><p>The BSP slashed the overnight borrowing rate by a total of 50 basis points so far this year and some analysts said another cut could be forthcoming before the end of the year.</p><p>Diokno also earlier signaled further reductions in the reserve requirement ratio for banks to increase liquidity.</p><p>Gross domestic product may grow to 6.2 to 6.4 percent for the rest of the year, driven by policy easing, government spending and “healthy” consumption, Mapa said.</p><p>President Rodrigo Duterte&#x27;s economic managers had put in place several measures to tame inflation, which peaked at near 10-year highs last year. This included replacing import quotas on rice with tariffs.</p><p>Malacañang on Thursday assured the public that the Duterte administration would “work double time” to address socioeconomic concerns.</p><p>“We assure our people that our success in taming inflation will not lull us into complacency,” Presidential Spokesman Salvador Panelo said.</p><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="http://sa.kapamilya.com/absnews/abscbnnews/media/2019/business/09/05/chart-inflation.jpg"/><figcaption><em>ABS-CBN Data Analytics</em></figcaption></figure></div>

<p>The consumer price index rose 1.7 percent in August from 2.4 percent in July. The median forecast of economists in a Bloomberg poll was 1.8 percent. It was also the first time in 3 years that inflation was below government's target.</p>

The consumer price index rose 1.7 percent in August from 2.4 percent in July. The median forecast of economists in a Bloomberg poll was 1.8 percent. It was also the first time in 3 years that inflation was below government's target.