Philippines’ CPI inflation likely at 2.4% in 2016

Inflation rate in Philippines increased to 5 month high in November. The higher inflation rate is contributed by increased in food prices as supplies were disrupted. Core inflation rate also escalated to 1.8% during the reference month.

Since the higher inflation rate is result of poor weather condition, it seems to be temporary. Therefore, the Bank is expected to keep its rates unchanged next week. 

"We expect 2015 average inflation to come in at 1.4%, and forecast 2016 CPI inflation will rise to 2.4%. Following today's print, we remain comfortable with our forecasts, as they incorporate a manageable pace of core inflation and a modest increase in energy costs in 2016. We continue to believe the medium-term risks to inflation centre on El Niño and its potential impact on agricultural prices", says Barclays in a research note.