Philippines' inflation spiked to its highest since 2011

Rates hit 4.5% yoy.

According to DBS, May CPI inflation surged to 4.5% YoY, highest since late 2011. Food inflation continues to be the main driver, as it came in at a 5-year high of 6.7% YoY.

The authorities have warned that a prolonged dry spell may sustain the upward pressure on food prices going forward. The secondary impact from higher food prices will put some pressure on prices across the board, maintaining the overall upward trend in CPI inflation.

Here's more from DBS:

At the current pace of growth, there is a good chance CPI inflation may touch 5% YoY in 3Q. That will only widen the differential between inflation and policy rate even further.

While it may be temporary, it is still likely to trigger a reaction from the central bank. The disappointing 1Q GDP print last week may be a factor that pushes the central bank to delay further policy tightening.

But domestic demand remains relatively strong, particularly on the investment front, and upcoming data will continue to support this view.

Following the adjustment done to the reserve requirement rate in the two previous policy meetings, expect the BSP to adjust its key policy rate higher going forward. Look for a total of 50bps rate hikes in 2H14.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia