The Philippine Statistics Authority (PSA) [link] revealed that inflation quickened slightly in April to 3.8% y/y, up from the 3.7% reading in March, but below estimates from economists who (on average) were expecting to see inflation come in at around 4.1% for the month. The BSP released a statement yesterday on the 'medium-term inflation path' which noted that the April inflation number is within the central bank's forecast range (3.5% to 4.3%), and that it was consistent with the BSP's projection that 'inflation could accelerate temporarily above the target range in the next two quarters... due to the possible negative impact of adverse weather conditions on domestic agricultural output and positive base effects.' The BSP said that it expects our full-year average inflation to 'return to the target' range and for inflation to remain within that range for 2025.

MB bottom-line: I don't know a single analyst who expects the BSP to do anything other than 'hold the course' when it meets next week to set interest rates. But I do know a bunch of people in my personal life who are struggling to make ends meet in Metro Manila between rent, food, and transportation costs. And I know a lot of corporations that are struggling under the oppressive weight of their debt. The interesting thing about April's consumer price index data is that it's actually down marginally from February/March (121.4 vs 121.9), and the peso is back down to the low ?57s after a quick flirtation with ?58. High rates aren't keeping the price of rice in check. High rates aren't suppressing excess demand for utilities. Let's cut rates, give people and businesses a break, and focus on the government's plan to insulate us from the inevitable supply-side shocks that we're going to face this year and in the years to come.

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