Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Headline inflation slowed down to 3.1 percent year-on-year in May from 3.4 percent in April, but was within the BSP’s forecast range of 2.9-3.7 percent for the month. The resulting year-to-date average inflation rate of 3.1 percent was also in line with the Government’s target range of 3.0 percent ±1.0 percentage point for 2017.
Similarly, core inflation—which excludes certain volatile food and energy items to measure underlying price pressures—eased to 2.9 percent in May from 3.0 percent in the previous month. By contrast, month-on-month seasonally-adjusted headline inflation rose to 0.2 percent in May from 0.1 percent in April.
The lower inflation reading in May was driven largely by lower prices of certain food items, domestic petroleum products, and electricity rates. Food inflation decelerated as key food items particularly fish, oils and fats, as well as vegetables, posted lower prices during the month. Likewise, non-food inflation eased due to downward adjustments in electricity rates as a result of lower power generation charges as well as to lower international crude oil prices which were reflected in price reductions in LPG, kerosene, gasoline, and diesel.
Governor Amando M. Tetangco, Jr. said that the latest inflation outturn further supports the BSP’s assessment of a manageable inflation outlook over the policy horizon. Looking ahead, the BSP will continue to closely monitor price developments and evolving inflation outlook in line with the BSP’s commitment to price stability conducive to balanced and sustained economic growth.