Lower inflation allows more BSP policy easing

As manufacturers experience only mild producer price inflation, central banks in emerging markets (EMs), including the Philippines, are expected to cut interest rates some more in the near term.

- BY BEN ARNOLD DE VERA

“Encouragingly, the price components of the PMIs [purchasing managers’ indices] fell again in June. This should provide further room for EM central banks to further lower interest rates to support weak growth outlooks,” Capital Economics research assistant Jack Oatley said in a July 1 report.

S&P Global reported earlier that the Philippines’ manufacturing PMI rebounded to 50.7 in June from 50.1 in May, sustaining growth even as Oatley noted that for most of Asian EMs, “PMI readings have remained relatively weak and in contractionary territory in most.”