Inflation eases further, hits 5-year low in May

MANILA, Philippines — Inflation in the country continued to ease in May, slowing to its lowest level in over five years due primarily to the downtrend in utility costs, the Philippine Statistics Authority (PSA) said.

Headline inflation slowed further to 1.3 percent in May from 1.4 percent the previous month and 3.9 percent in May 2024, National Statistician Dennis Mapa said at a press conference yesterday.

The headline inflation, or the rate of increase in average prices of goods and services typically purchased by a Filipino household, was the lowest since November 2019 when inflation was at 1.2 percent.

Driving the downtrend in inflation was the slower increase in housing, water, electricity, gas and other fuels at 2.3 percent in May from the previous month’s 2.9 percent.

Another major driver of the lower May inflation was restaurant and accommodation services, which posted a slower uptick of two percent last month from 2.3 percent in April.

In addition, the transport commodity group posted a faster decline of 2.4 percent in May from a 2.1-percent drop in the previous month.

Food inflation was steady at 0.7 percent and significantly lower than the 6.1 percent registered in the same month last year.

Inflation for rice was at -12.8 percent in May from -10.9 percent in April.

Mapa said the P20 per kilo rice program is among the reasons for the decline in the overall price of the staple.

He said the average price of regular milled rice was at P43.19 per kilo in May, down from P44.45 per kilo the previous month and P51.11 per kilo in May last year.

For well-milled rice, the average price also decreased to P49.45 per kilo in May from P50.54 the previous month and P56.06 in May last year.

As for special rice, the average price was at P59.80 per kilo in May from the previous month’s P60.69 and P64.41 in May 2024.

Mapa said rice inflation has been negative since January, while the average inflation for the staple in the January to May period is at -7.7 percent.

“The expectation is that it will continue to be negative for at least maybe until August,” he said, noting the decline in rice prices and base effects.

“But definitely the average [inflation for rice] for the whole year will be negative,” he said.

From January to May this year, inflation averaged 1.9 percent.

The Department of Economy, Planning and Development (DEPDev) said the lower inflation shows the country’s progress in easing price pressures and keeping costs stable.

“We are encouraged by this development. It reflects the success of our sustained efforts to protect the purchasing power of Filipinos and ensure a more affordable cost of living,” DEPDev Undersecretary Rosemarie Edillon said.

Moody’s Analytics economist Sarah Tan said inflation in the country is expected to remain low for the rest of the year.

“However, the downtrend is unlikely to persist until the end of the year,” she said.

She said part of the deceleration in inflation was contributed by easing food inflation due to the high base effect from the El Niño weather pattern in the first half of 2024 and lower rice tariffs in the second half of last year.

“These effects will taper off in the second half of 2025,” she said.

To sustain the downward trend in inflation, the DEPDev said the government would continue implementing policies to mitigate inflationary pressures and protect the purchasing power of Filipino families.

DEPDev said the Food and Drug Administration (FDA) and the Department of Agriculture (DA), in particular, are strengthening collaboration to ensure the availability of safe and effective animal vaccines amid the ongoing African swine fever (ASF) and avian influenza outbreaks.

The DA and the FDA are optimistic that an ASF vaccine would be ready for commercial rollout within the year.

In addition, the DA extended the deadline for the issuance of fish import permits to the end of this month to give time for importers to comply with the revised guidelines.

“We remain committed to executing the necessary measures to keep prices low and stable. With this, we are optimistic about the government meeting its headline inflation target of two to four percent for the year,” Edillon said.