By Komfie Manalo
The Philippine Statistics Authority (PSA) said Friday that headline inflation eased to 3.7% in June from 3.9% the previous month due to stabilizing energy and transport costs. Inflation in June last year was higher at 5.4%.
In a press briefing, PSA Undersecretary and National Statistician Dennis Mapa said the downtrend in overall inflation in June was primarily influenced by the slower annual increment of housing, water, electricity, gas, and other fuels, which was 0.1% from 0.9% in May.
"We are committed to maintaining the country's inflation rate within our target range of 3 (percent) 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," National Economic and Development Authority (NEDA) secretary Arsenio Balisacan said.
"We will continue to work closely with the government, stakeholders, and other priority sectors to implement necessary measures to ensure that the country will have a sufficient and affordable food supply – including rice – for every Filipino," he added.
Year-to-date headline inflation was at 3.5%, well within the government's 2% to 4% target.
The sharper deflation in electricity, recorded at -13.7% from -8.5% in May, significantly contributed to the slowdown.
Transport inflation, likewise, decelerated to 3.1% from 3.5% due to lower inflation rates in personal transport and gasoline.
Restaurants and accommodation services also contributed to the lower inflation, which was 5.1% in June, down from 5.3% in the previous month.
Food inflation rose to 6.5% from 6.1% in May due to higher prices of vegetables, meat, and corn.
Rice inflation, however, already slightly eased to 22.5% from 23% in May due to the reduction in the prices of well-milled rice.
"We have a big reduction... about 20 centavos per kg. in well-milled rice, so we have a -0.2% reduction for that particular commodity, so we have a slight reduction in the overall inflation," Mapa said.
"The one that contributed in terms of prices is the price for the well-milled rice."
He said the average price per kg. of well-milled rice decreased to P55.96 from P56.06 in May.
The Development Budget Coordination Committee (DBCC) is also committed to implementing monetary policy measures and well-targeted government interventions that address the primary drivers of inflation.
"This includes implementing the new Comprehensive Tariff Program for 2024-2028 to improve the affordability of essential commodities amid the rising global prices, and the Food Stamp Program to mitigate the impact of elevated food prices on the poor and vulnerable sector," the DBCC said in a statement.
President Ferdinand R. Marcos Jr. issued Executive Order (EO) 62, which modified the tariff rates on various products to ensure a continuous supply of goods and protect the purchasing power of the Filipino people.
The rice tariff, in particular, was reduced to 15 percent from 35 percent.
Medium-term inflation path
In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said the June inflation of 3.7% is within its forecast range of 3.4% to 4.2%.
"The latest inflation outturn is consistent with the BSP's latest outlook that inflation will settle within the target range for 2024-2025 with inflation expectations remaining well-anchored," it said.
The BSP noted that the balance of risks to the inflation outlook shifted to the downside for 2024 and 2025 due mainly to the impact of lower import tariffs on rice under EO 62.
"Nonetheless, higher prices of food items other than rice, transport charges, and electricity rates continue to pose upside risks to inflation," it said.
The BSP said the Monetary Board supports the national government's implementation of the tariff reduction on rice imports to address supply-side pressures on prices and sustain the disinflation process.
"Moving forward, the BSP will ensure that monetary policy settings remain in line with its primary mandate to safeguard price stability conducive to sustainable economic growth," it said.
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