Philippines Inflation Eases to 6.4% in June as Fuel and Food Prices Cool

The Philippine Statistics Authority reported on Tuesday, July 7, that inflation in the Philippines eased to 6.4% in June, down from 6.8% in May, marking the second consecutive month of decline. Lower prices of fuel and some food items, including rice and meat, drove the slowdown. Despite the easing, inflation remained well above the government's target range of 2% to 4%, following a three-year high of 7.2% recorded in April.

BSP Projected June Inflation Between 6% and 7%

The Bangko Sentral ng Pilipinas (BSP) had projected inflation would settle between 6% and 7% for June. The central bank stated that lower domestic oil prices and cheaper major food items could temper inflation, though higher electricity rates and vegetable prices could partly offset these downward pressures.

Balisacan Warned Inflation to Stay Above Target for Rest of Year

Department of Economy, Planning, and Development Secretary Arsenio Balisacan stated on Monday, July 6, that he expected the June inflation print to show another "improvement," but warned that price pressures would likely remain above the government's 2% to 4% target for the rest of the year. "We'll still be challenged by the inflation, but we are determined to get that inflation come down as fast as we can," Balisacan said. He added that some risks remain beyond the government's control, particularly oil-related shocks from the Middle East. "Hopefully this crisis in the Middle East will find a final solution so that there will be stability there because we depend a lot on our oil from that region," he said.

BSP Raised Interest Rate to 4.75% in June

The Monetary Board raised the benchmark interest rate by 25 basis points to 4.75% in June, marking its second consecutive hike. The BSP sought to keep still-elevated inflation risks under control. BSP Governor Eli Remolona Jr. stated that the economy could still absorb another 25-basis-point increase.

Analyst Neri Cited Fading Disinflation Pace

Bank of the Philippine Islands lead economist Jun Neri had expected headline inflation to ease to 6.5% in June, helped by the continued pass-through of fuel rollbacks and lower rice prices. However, he warned that the pace of disinflation may be fading, as most of the pump-price rollbacks may have already been reflected in retail prices.

FAQ

What was the Philippines inflation rate in June? Inflation in the Philippines eased to 6.4% in June, down from 6.8% in May, according to the Philippine Statistics Authority reported on Tuesday, July 7.

Why did inflation ease in June? Lower prices of fuel and some food items, including rice and meat, drove the slowdown in inflation for June.

Did the BSP raise interest rates in June? The Monetary Board raised the benchmark interest rate by 25 basis points to 4.75% in June, marking its second consecutive hike to control inflation risks.