Inflation in the Philippines decelerated to 3.7 percent in June, a slight drop from 3.9 percent in May, according to the Philippine Statistics Authority (PSA). This slowdown occurred even as food prices continued to climb.
PSA Undersecretary and National Statistician Dennis Mapa attributed in an ABS-CBN News report the easing inflation to slower increases in the costs of electricity, fuels, water, and housing, along with a reduction in transport costs.
However, Mapa highlighted that the annual increase in prices for food and non-alcoholic beverages rose to 6.1 percent in June, up from 5.8 percent in May. “Food inflation at the national level rose to 6.5 percent in June 2024 from 6.1 percent in May 2024,” the PSA reported, noting that it was slightly lower compared to June 2023’s rate of 6.7 percent.
The inflation rate for rice showed a minor decline, with prices rising by 22.5 percent in June, down 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 saw a slight decrease to P55.96 from P56.06. Special rice prices edged up to P64.56 from P64.41 the previous month.
Despite the overall decrease, Mapa cautioned that inflation might not have peaked yet. “We cannot yet see a definitive downward trend, given factors such as changes in electricity prices and the increase in the prices of oil and LPG,” he said. Mapa also mentioned that the recent wage hike in Metro Manila could influence July’s inflation figures, particularly in personal care and miscellaneous goods and services sectors.
Economic Planning Secretary Arsenio Balisacan emphasized the government’s commitment to maintaining inflation within the target range of 2 to 4 percent. “The easing in our inflation rate in June, mainly due to lower electricity rates, highlights the importance of strengthening our energy sector to sustain our gains,” Balisacan said.
For the first half of the year, the average inflation rate stood at 3.5 percent, with core inflation—excluding volatile food and fuel items—at 3.1 percent. The Bangko Sentral ng Pilipinas (BSP) has maintained a tight monetary policy to curb inflation, keeping interest rates steady in June but indicating a potential shift to a downside risk for 2024 and 2025.
Security Bank chief economist Dan Roses anticipates that the BSP might cut rates by 25 basis points each in August and October, suggesting that the BSP may move ahead of the US Federal Reserve in easing monetary policy.
