Inflation slows to 4.4% in June

MANILA, Philippines - Inflation slowed down in June after hitting a 30-month high in the previous month as lower prices of alcoholic beverages, housing and utilities tempered the continued rise in prices of rice, sugar and garlic.

In a report, the Philippine Statistics Authority said inflation reached 4.4 percent last month, slower than the 4.5 percent registered in May and 2.7 percent a year ago. The figure was within the Bangko Sentral ng Pilipinas’ forecast range of 4.1 to five percent for the month.

Without food or oil prices, core inflation slid to 2.8 percent in June from 3.1 percent in May.

“The June number, while softer than that of May’s, would bring year-to-date average to 4.2 percent, still above the midpoint of the NG (national government) target range of three to five percent for full year,” BSP Governor Amando M. Tetangco Jr. said in a text message to reporters.

“Therefore, we continue to be mindful of the risks to achieving the inflation target that remain, including second round effects that may ensue from supply-driven commodity price increases,” Tetangco continued.

“We will also be watchful of shifts in investor preference and changes in global growth dynamics due to AE (advanced economies’) monetary policy, which may lead to volatilities in the foreign exchange and other financial markets, BSP will adjust policy levers as appropriate to keep a lid on inflation and ensure financial stability pressures are in check,” he continued.

Looking at inflation by region, the rise in consumer prices in the National Capital Region decelerated to 3.6 percent in June from 3.8 percent in May. Areas outside the capital, meanwhile, saw the rate remain at 4.7 percent.

According to commodity group, the food and non-alcoholic drinks index accelerated to 7.4 percent in June from 6.7 percent in May, while the furnishing and household equipment index climbed to 2.6 percent from 2.5 percent.

The education index also rose to five percent last month from 4.7 percent in May.

These increases were tempered by the decline in the alcoholic beverages and tobacco index to 3.7 percent from four percent, and a slide in the housing, water, electricity, gas and other fuels index to 2.3 percent from 3.7 percent.

The transport index also went down to 1.3 percent from 1.5 percent, while the recreation and culture index slowed down to 1.2 percent from 2.3 percent.

Meanwhile, the clothing and footwear (3.4 percent), the health (three percent), the communication (0.1 percent), and the restaurant and miscellaneous (1.9 percent) indices remained steady in June from the previous month.