Inflation cools down further to 5.4% in June 2023

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(1st UPDATE) This is the fifth straight month of deceleration in the Philippines’ inflation rate, mainly due to easing prices of food and petroleum products

MANILA, Philippines – Inflation or the rate of increase in prices of goods moved at a slower pace of 5.4% in June, the Philippine Statistics Authority said on Wednesday, July 5.

This is the fifth straight month of deceleration from the peak of 8.7% in January, mainly due to easing prices of food and petroleum products.

A year ago or in June 2022, as well as in May 2023, inflation was at 6.1%.

The June 2023 figure is the lowest rate in 13 months or since June 2022, according to the National Economic and Development Authority (NEDA).

Inflation for food and non-alcoholic beverages slowed down from 7.4% in May to 6.7% in June, and transport from -0.5% to -3.1% as gasoline and diesel prices went down further.

In the National Capital Region, inflation dropped from 6.5% in May to 5.6% in June, while in areas outside NCR, inflation fell from 6% to 5.3%.

Mimaropa registered the highest inflation rate among regions, still at 7.2% in June, same as in May. The Cordillera Administrative Region had the lowest at 3.2% in June from 3.9% in May.

Philippine Statistics Authority

For the bottom 30% income households, inflation eased from 6.7% in May to 6.1% in June.

Year-to-date, inflation is at 7.2%, still much higher than the government’s target range of 2% to 4%.

The Bangko Sentral ng Pilipinas (BSP) sees average inflation for 2023 settling at 5.4% as lower figures are expected to be registered, especially during the last quarter.

“The June 2023 inflation outturn of 5.4% is within the BSP’s forecast range of 5.3% to 6.1%, consistent with the overall assessment that inflation will remain elevated over the near term before gradually decelerating back to target range in Q4 2023 in the absence of further supply shocks,” the central bank said in a statement on Wednesday.

Economic managers, however, still see upside risks to inflation due to El Niño’s looming impact on food prices and utility rates, and upward adjustments in fares and wages.

“The Inter-Agency Committee on Inflation and Market Outlook will continue to take proactive steps to address the main causes of inflation. This is particularly important considering the impending El Niño, which poses risks to food supply and prices,” said NEDA Secretary Arsenio Balisacan in a separate statement on Wednesday. – Rappler.com

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