The country’s annual inflation rate dipped slightly to 1.3 percent in May, down from 1.4 percent in April, according to data released by the Philippine Statistics Authority. While the decline is modest, it marks a continued deceleration in price increases, indicating a slower pace of inflationary momentum.
This brings the five-month inflation rate to 1.9 percent or lower than the target set by the Bangko Sentral ng Pilipinas (BSP) for the year of 2 to 4 percent.
The current rate remains well below the country’s average inflation of 7.96 percent, recorded between 1958 and 2025. It also stands in sharp contrast to historical extremes, including the peak of 62.8 percent in September 1984 and a low of minus 2.1 percent in January 1959.
Economists note that while the change is minor, the trend toward easing inflation may bolster consumer confidence, particularly for lower- and middle-income households sensitive to price volatility. Slower inflation often translates to increased purchasing power, potentially encouraging household spending—a key driver of domestic economic growth.
Shifts in the inflation trajectory influence consumption patterns, especially in emerging markets like the Philippines.
The Bangko Sentral ng Pilipinas is expected to closely monitor the easing trend ahead of its next policy review, with implications for interest rates and broader monetary policy as it balances inflation control with growth support.
