April inflation was 1.4% y/y

The Philippine Statistics Authority (PSA) [link] revealed that April’s inflation reading came in at 1.4% y/y as compared to April 2024. That’s the lowest year-on-year rise in prices since 2019. April’s 1.4% print reduced our year-to-date average to 2.0%. The BSP said that “the more manageable inflation outlook and the downside risks to growth allow for a shift toward a more accommodative monetary policy stance.” Our central bank also said that April’s inflation reading was “within the BSP’s forecast range of 1.3 to 2.1 percent.” The BSP’s policy range is to maintain average inflation in the 2.0 to 4.0 percent range.

  MB BOTTOM-LINE:  Lots of talk about how much “space” this result gives the BSP to cut rates, but I hope the BSP charts its own bold path with a decisive cut. And I don’t want to see the BSP launder any of these “dovish feels” into another round of massive RRP cuts. The banks are obscenely profitable already. Regular people need relief from rates that have been elevated for years. Banks don’t need anything, so if the BSP tries to pass them another RRP cut gift, I’m going to lose it.

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