Philippines' inflation to slip to 3.7%

But average inflation is still pegged at 3.3% this year.

According to DBS, headline inflation is going to stay elevated at 3.7% YoY in September after reaching 3.8% in the preceding month. In the first seven months of the year, inflation averaged only 3%, but floods in August led to spikes in food prices.

Here's more from DBS:

Sequentially, prices of food and non-alcoholic beverages rose by 1% MoM. We are not unduly worried about inflation, noting that food prices should ease once the flood disruptions are over.

Notably, inflation is still expected to average 3.3% this year, well within the central bank’s (BSP) 3-5% target range. In the immediate term, growth and inflation risks are fairly balanced.

The global outlook remains challenging amid a slowdown in the major economies and external demand will continue to drag. Depending on how the export numbers play out, there may be a need for a further cut in the overnight borrowing rate in 4Q.

Beyond the short term, however, the domestic economy has been doing well with loans growing at a moderate clip. Once external risks diminish, the focus will once again be on inflation.