By Karen Lema and Mikhail Flores
MANILA (Reuters) -Philippine inflation was at its lowest level in more than five years in April due to falling food and transport costs, the statistics agency said on Tuesday, giving the central bank room to ease policy to support growth.
Annual inflation slowed to 1.4% in April, down from 1.8% in March and at its lowest since November 2019. This brought the year-to-date average inflation to 2.0%, matching the low end of the central bank’s 2.0% to 4.0% target for the year.
“The more manageable inflation outlook and the downside risks to growth allow for a shift toward a more accommodative monetary policy stance,” the central bank said in a statement.
The central bank resumed its easing cycle last month, cutting its key policy rate by 25 basis points to 5.5%. It signalled more reductions to come in “baby steps” to help the economy cope with global challenges.
The Philippines is scheduled to release its first-quarter GDP figures on May 8, ahead of the central bank’s next policy meeting on June 19.
Last month’s slower print was attributed to a 10.9% year-on-year drop in rice prices, sharper than March’s 7.7% fall, and a 2.1% decrease in transport costs, compared to a 1.1% decline in the previous month.
Core inflation, which excludes volatile items such as food and energy, remained steady at 2.2%, unchanged from March.
(Reporting by Mikhail Flores and Karen Lema; Editing by John Mair and Saad Sayeed)
