Philippines Government Bond 10Y

The Philippine Statistics Authority reported that the consumer price index, the main measure of inflation, rose 7.2% in September from a year earlier, above the 6.8% analysts had expected, and may support another interest rate increase by the Philippine central bank. Accelerating prices of rice and vegetables were the main reason headline inflation surged in September, after monsoon rains caused widespread flooding and damaged agricultural crops. Gasoline and diesel prices also climbed, tracking global oil prices, which have soared amid a new round of conflict in the Middle East. The higher-than-expected inflation figure may push the Philippine central bank, known as the BSP, to press ahead with tighter monetary policy, after it has already raised its policy rate by a total of 0.75% since April. BSP Governor Eli Remolona had earlier signaled that inflation risks could rise further because of the El Niño phenomenon and wage increases. Philippine inflation has exceeded the BSP's 3% target since the Iran war erupted and triggered a global energy shortage crisis, sending oil prices soaring, which has hit import-dependent countries like the Philippines hard. A weaker peso against the dollar has also compounded the inflation problem. The BSP's next monetary policy meeting will be held on October 22.