PH inflation further falls to 1.3 percent in May

Metro Manila, Philippines - The country’s inflation rate further eased to 1.3 percent in May due to slower increases in costs in housing, water, electricity, gas and other fuels, the statistics agency said Thursday, June 5.

The Philippine Statistics Authority (PSA) said the average rate of price increases was 1.9 percent, lower than the government’s target of 2 percent to 4 percent.

In April, the inflation print was 1.4 percent. In November 2019, the Philippines had a rate of 1.2 percent.

But while there was a slowdown in some utility costs, Filipinos also saw higher prices in meat, fish, eggs, and vegetables last month, National Statistician Dennis Mapa said in a briefing.

Pork prices remained high in May with its inflation rate at 11.9 percent, rising from 10.3 percent in April, and last month’s top contributor, PSA data showed.

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Among the top five contributors in May’s inflation were pelagic fish products and chicken meat.

“Depending on the movement itong iba pang items in the food basket, pwedeng tumaas or bumaba sa month of June and then we will also track fuel kasi substantial din ang input,” Mapa said.

[Translation: Depending on the movement of the items in the food basket, the inflation rate in June may go up or down, and then we will also track fuel because it has a substantial input.]

Rice prices, however, continued with its downtrend, posting a negative 12.8 percent inflation in May. Rice has a substantial portion in the country’s inflation.

Mapa said the PSA has seen effects from lower overall prices in rice and the introduction of P20 subsidized rice to vulnerable sectors to May figures.

“The expectation [is that] it will continue to be negative for at least siguro hanggang [until] August and we will see,” Mapa said. “But definitely the average for the whole year will be negative.”

The national average prices of rice varieties have dropped around P1 per kilogram from April to May. Last month, the PSA said regular milled rice was P43.19/kg, well-milled rice was P49.45/kg, and special rice was P59.80/kg.

The Bangko Sentral ng Pilipinas said May’s inflation was consistent with its assessment of a “manageable inflation environment.”

“On balance, the more manageable inflation outlook and the downside risks to domestic economic activity allow for a shift toward a more accommodative monetary policy stance,” the Bangko Sentral ng Pilipinas said.

The BSP resumed its easing cycle in April, reducing its key policy rate by 25 basis points to 5.5 percent. The central bank is “[contemplating] further cuts this year.”

Meanwhile, the government reaffirmed its commitment to implement policies “aimed at mitigating inflationary pressures and safeguarding the purchasing power of Filipino families,” the Department of Economy, Planning, and Development said in a statement.