Inflation eases in May to 1.3 percent

MANILA, June 14 ------ Philippine inflation further eased in May to 1.3 percent, the Philippine Statistics Authority said. This was slower than the 1.4 percent clip seen in April, and it brought the average inflation for the first five months of the year to 1.9 percent, the PSA said. This was also within the Bangko Sentral ng Pilipinas' forecast range of 0.9 to 1.7 percent.

PSA Undersecretary and national Statistician Claire Dennis Mapa said the lower inflation was due to slower increases in the costs of housing, water, electricity, gas and other fuels, which rose 2.3 percent. The costs of restaurant and accommodation services also saw a slower increase—from 2.3 percent in April to 2 percent in May. Inflation for transportation also shrunk by 2.4 percent in May.

Core inflation, which strips out food and energy items that prone to wild swings in prices, was steady at 2.2 percent in May. Core inflation in May last year was at 3.1 percent. The state statistics bureau also noted that inflation for food and non-alcoholic beverages was at 0.9 percent in May. Meat inflation went up to 7.9 percent from 7.7 percent, while fish and seafood inflation jumped to 5.7 percent from 4.3 percent the month before.

Inflation for milk, eggs, and other dairy products also went inched up to 4.9 percent from 4 percent. The PSA also noted that rice prices continued to go down, with a negative 12.8 percent inflation in May from negative 10.9 percent in April. On average, the price of regular milled rice was at P43.19/kg in May from P44.45/kg in April, Mapa said.

The price of well-milled rice also went down to P49.45/kg from P50.54/kg, and that of special rice to P59.80/kg May from P60.69/kg in April. Mapa said the agency expects rice inflation to stay in the negative as prices of the staple grain drop. “So definitely, eto, meron tayong base effect, at the same time meron naman talagng trend doon sa level na bumaba siya, even on a month-on-month basis,” he said.

The official noted, however, that there are no indications yet that inflation will keep easing in the coming months. “Mixed yung ating result, particularly sa food ano? Of course yung ating bigas talagang nakita natin pababa na talaga. On the other hand, yung kanina nga, yung ating mga ibang groups doon sa food commodities, food basket natin at nagtaasin din, particularly itong karne ng baboy, manok,” he said

Economic managers are targeting to keep inflation within 2 to 4 percent this year. In a statement, the Bangko Sentral ng Pilipinas (BSP) said the risks to inflation remain broadly balanced. “Upside pressures come from possible increases in transport charges, meat prices, and utility rates. Meanwhile, downside risks are linked to the continuing effects of lower tariffs on rice imports and the expected impact of weaker global demand,” the central bank said.

The BSP said 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 in April cut its key rate by 25 basis points, bringing the benchmark target reverse repurchase rate to 5.5 percent.

Source: news.abs-cbn.com