Macroeconomic Forecast Philippines

In line with our view, Bangko Sentral ng Pilipinas (BSP) raised its benchmark reverse repurchase and repurchase rates by 25bps to 5.25% and 7.25% respectively on June 5, after the release of consumer price inflation (CPI) data revealed that inflation rose to a nine-year high of 9.6% y-o-y in May (from 8.3% in April) on the back of higher fuel and food prices. Fuel, energy and water inflation came in at an 18-month high of 8.2% y-o-y last month, while food, beverage and tobacco prices rose by 13.7% y-o-y - the fastest pace since at least 2003. Core CPI meanwhile hit a two-year peak of 6.2% y-o-y, up from 5.9% in April.

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