Inflation in the Philippines eased to 3.7 percent in June, even as food prices continued to rise, the Philippine Statistics Authority (PSA) reported on Friday. This marks a decrease from May’s 3.9 percent inflation rate, thanks to slower increases in electricity, fuel, water, and housing costs.
The reduced inflation rate was also influenced by slower transport cost increases. However, PSA Undersecretary and National Statistician Dennis Mapa noted that prices of food and non-alcoholic beverages rose by 6.1 percent annually in June, up from 5.8 percent in May 2024. Specifically, national food inflation climbed to 6.5 percent in June from 6.1 percent in May, although it was lower than the 6.7 percent recorded in June 2023.
Rice inflation slightly declined to 22.5 percent in June from 23 percent in May. The price of regular milled rice increased marginally to P51.07 per kilo from P51.03 in May, while well-milled rice prices rose to P55.96 from P56.06. Special rice prices also saw a slight rise to P64.56 from P64.41 the previous month.
The June inflation rate remained within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 3.4 to 4.2 percent and the government’s target of 2 to 4 percent. Despite the easing inflation, Mapa cautioned that it is uncertain if inflation has peaked, given that fuel, electricity, and meat and vegetable prices rose in early July.
Mapa also mentioned that the wage hike in Metro Manila might impact July’s inflation, particularly in specific commodity groups such as personal care, miscellaneous goods and services, and restaurant and accommodation services.
The National Economic and Development Authority (NEDA) emphasized its commitment to maintaining inflation within the government’s target range. Economic Planning Secretary Arsenio Balisacan highlighted the importance of strengthening the energy sector to sustain the gains in lowering inflation, citing the June easing primarily due to lower electricity rates. Balisacan assured that NEDA will continue collaborating with government and stakeholders to ensure Filipinos have access to sufficient and affordable rice.
For the first half of the year, inflation averaged 3.5 percent. Core inflation, excluding volatile food and fuel items, was 3.1 percent. The BSP has maintained a tight monetary policy to curb inflation, keeping interest rates steady in its June meeting while noting that the balance of risks to inflation has shifted to the downside for 2024 and 2025.
Security Bank’s chief economist Dan Roses expects the BSP to cut rates by 25 basis points each in August and October, suggesting that the BSP might lead rate cuts ahead of the US Federal Reserve
