MANILA — Philippine annual inflation eased to a five-month low in April, the statistics agency said on Tuesday, reflecting the drop in global oil prices and weaker economic activity due to the coronavirus outbreak.
The annual inflation rate slowed to 2.2% in April from the previous month’s 2.5%. It was slightly above the 2.1% forecast in a Reuters poll, but close to the bottom end of the central bank’s 1.9-2.7% estimate for the month.
Core inflation, which excludes volatile food and fuel prices, was 2.8%, slowing from March’s 3.0%.
Last month’s print brought the average inflation rate in the four months to April to 2.6%, well inside the central bank’s 2%-4% target this year.
Economists said the easing trend in inflation would provide the central bank greater room to cut interest rates and reduce banks’ reserve requirement ratio to support growth.
The Philippines was among the first regional nations to take drastic measures against the virus by ordering a quarantine for half of the population of more than 107 million. Growth is forecast to contract for the first time in more than two decades this year, the central bank has said.
The Philippines will announce first quarter gross domestic product data on May 5.
The central bank has cut interest rates thrice this year, with the latest one an off-cycle move in April that brought the benchmark interest rate to a record low of 2.75%.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno hinted on Monday he was in no rush to slash policy rates again, saying it would be prudent on the part of policymakers to wait for the series of policy easing to work their way through the economy.
—Reporting by Karen Lema; Editing by Kim Coghill