WED 05 DEC 2018

Economy

November inflation lower than expected

at 6.0%

November inflation fell to 6.0% from 6.7% in September and October of 2018. The said number
was also better than consensus estimate of 6.3%.

The slower growth of inflation was largely due to the further deceleration in the price increase
of food and non-alcoholic beverages. From 9.7% in September and 9.4% in October, the price
increase of food and non-alcoholic beverages slowed down to 8.0% in November. In fact, the
price of food and non-alcoholic beverages fell by 0.7% on a month-on-month basis. Note that
food and non-alcoholic beverages account for 38.3% of the consumer basket.

Also contributing to the decline in inflation was the slower increase in the price of housing, water,
electricity, gas and other fuels (to 4.2% in November from 4.8% in October) and communication
(to 0.4% in November from 0.5% in October). Although the year-on-year increase in the price of
transport was flat at 8.9% for October and November, the month-on-month increase actually
slowed down from 0.9% in October to 0.6% in November.

Lower inflation for the month of November supports our view that inflation has already peaked.
This in turn should help interest rates go down. However, the drop in interest rates might be
limited in the short term as core inflation, which excludes the impact of more volatile food
and fuel prices, continued to accelerate to 5.1% in November from 4.9% in October. Once
core inflation goes down, the BSP may start cutting benchmark rates and/or banks’ reserve
requirement, leading to a more significant decline in interest rates.

APRIL LYNN TAN, CFA

VP & HEAD OF RESEARCH
april.tan@colfinancial.com

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside of
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 ALERT I ECONOMY: NOVEMBER INFLATION LOWER THAN EXPECTED AT 6.0%

WED 05 DEC 2018

IMPORTANT RATING DEFINITIONS

BUY
Stocks that have a BUY rating have attractive fundamentals and valuations based on our analysis. We expect the share price to outperform the market in the next six to
12 months.

HOLD
Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive valuations 2) attractive valuations but near-term earnings outlook might be poor
or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely in line or underperform in the market in the next six to twelve
months.

SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the share price to underperform in the next six to12 months.

IMPORTANT DISCLAIMER
Securities recommended, offered or sold by COL Financial Group, Inc. are subject to investment risks, including the possible loss of the principal amount invested.
Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and said information may be
incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are subject to change
without prior notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. COL Financial and/
or its employees not involved in the preparation of this report may have investments in securities of derivatives of the companies mentioned in this report and may trade
them in ways different from those discussed in this report.

COL RESEARCH TEAM

APRIL LYNN TAN, CFA

VP & HEAD OF RESEARCH
april.tan@colfinancial.com

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA

DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com

ANDY DELA CRUZ JOHN MARTIN LUCIANO FRANCES ROLFA NICOLAS

SENIOR RESEARCH ANALYST SENIOR RESEARCH ANALYST RESEARCH ANALYST
andy.delacruz@colfinancial.com john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com

JUSTIN RICHMOND CHENG ADRIAN ALEXANDER YU

RESEARCH ANALYST RESEARCH ANALYST
justin.cheng@colfinancial.com adrian.yu@colfinancial.com

COL FINANCIAL GROUP, INC.

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