Inflation cools to 6.8 percent in May

MANILA, Philippines — Consumer price growth eased in May from the previous month’s pace, driven by the slower uptick in fuel and food costs, according to the Philippine Statistics Authority.

National Statistician Dennis Mapa said in a press conference yesterday that headline or overall inflation slowed to 6.8 percent in May from 7.2 percent in April.

The latest inflation print landed below the Bangko Sentral ng Pilipinas’ forecast of 7.1 to 7.9 percent for May. It was also lower than the 7.7 percent median forecast yielded by The STAR’s poll of 12 economists.

However, it was higher than the 1.3-percent inflation print in May last year.

The lower inflation was driven mainly by the slower increase in the transport index at 16.2 percent in May from 21.4 percent in April.

This was due to slower price increases in diesel (58.5 percent in May from 122.7 percent in April) and gasoline (51.6 percent from 59.6 percent).

Also driving lower overall inflation was the food and non-alcoholic beverages commodity group, which registered a slower increase of 5.7 percent in May, down from six percent in April.

Inflation for food alone also moderated to 5.8 percent in May from the previous month’s 6.1 percent.

Despite the slower food inflation, a faster increase was observed in rice prices at 15.6 percent in May from 13.7 percent in April.

From January to May, inflation averaged 4.5 percent, breaching the government’s target band of two to four percent.

Mapa said there are risks that could affect inflation in the coming months.

“The risks moving forward would really be the impact of external factors on fuel and energy commodities and the prices of food,” he said.

Despite slower inflation in May, the Department of Economy, Planning and Development (DEPDev) said the government would continue implementing measures to ease upward pressures arising from elevated global oil prices.

“While global oil prices remain elevated, transport inflation has begun to slow down. The government’s timely and targeted interventions help mitigate the impact of external shocks on Filipino households. This underscores the importance of maintaining responsive and coordinated policies that protect consumers while safeguarding economic stability,” DEPDev Secretary Arsenio Balisacan said.

In particular, the government will expand support for vulnerable sectors.

To ensure adequate supply, it will also procure fuel, explore alternative oil sources, and continue efforts to accelerate the shift to renewable energy.

The government also aims to stabilize farmers’ earnings and strengthen their preparedness for El Niño through cloud-seeding operations, the deployment of solar-powered irrigation systems, and crop diversification programs.

“While the easing of inflation in May is encouraging, we recognize that price pressures remain elevated. Thus, well-targeted government interventions are critical to cushioning the impact of domestic shocks such as weather disturbances and external headwinds such as ongoing geopolitical tensions, while preserving business continuity,” Balisacan said.