In January, Inflation is seen easing further to 4.6% as food supplies normalize and fuel price decline, according to UnionBank’s Economic Research Unit (ERU). Note that December 2018 inflation also eased to 5.1% from November’s print of 6.0%.

The further slowing of January inflation is due to the normalization of food supplies such as rice, vegetables, and other meat products. Lower electricity price and the relatively lower fuel prices have also contributed to the expected lower level of prices this January. A Business World poll among 12 analysts resulted to a median estimate of 4.5%.

This slower inflation enables the Bangko Sentral ng Pilipinas (BSP) to keep interest rates steady for two (2) consecutive meetings. ERU believes that the BSP will hold rates steady.

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