Prices of consumer goods in the country eased further in June, an added incentive for the Bangko Sentral ng Pilipinas to again keep policy rates on hold at its meeting in mid-August, and possibly start monetary easing later this year.
The Philippine Statistics Authority reported on Wednesday that headline inflation in June decelerated to 5.4 percent after holding steady at 6.1 percent in May and April, and matched the inflation rate recorded in May 2022.
Economic Planning Undersecretary and National Statistician Dennis Mapa said inflation rate in June decelerated due to a slower increase in the prices of food and non-alcoholic beverages, a decline in the cost of transport, and the lower cost of housing, water, electricity, gas and other fuels.
Headline inflation average 7.2 percent, which suggest significant slowdown in inflation in the second half of 2023 if the central bank’s forecast for average inflation this year of 5.5 percent is to be met.
Core inflation, which excludes selected food and energy items, also eased in June to 7.4 percent from 7.7 percent in May.
The central bank kept overnight rates at 6.25 percent for the second month in a row in June after an aggressive monetary tightening that started in May 2022 that raised key rates by 4.25 percentage points. The central bank lowered its policy rates to a historic low 2 percent to help the economy cope with the COVID-19 pandemic.
The next BSP policy meeting is scheduled in mid-August.
Meantime, inflation for bottom 30 percent income households also eased to 6.1 percent in June from after accelerating to 6.7 percent in May.
