Inflation Decelerates to 1.2% in June

Manila—(PHStocks)—Bangko Sentral ng Pilipinas (BSP)—Headline inflation slowed down to 1.2% in June from 1.6% in May―a record low using the 2006-based CPI series.

The June reading remained within the BSP’s range forecast of 1.1%-2% percent for the month. This brought the year-to-date average inflation rate to 2%, which is at the low end of the government’s inflation target range of 3% ±1 percentage point for 2015.

Likewise, core inflation—which excludes certain volatile food and energy items to better capture underlying price pressures—decelerated to 2% in June from 2.2% in the previous month.

The continued deceleration of headline inflation in June was driven largely by slower food inflation due to moderate price increases of most food items particularly rice, meat, fish, oils, and fruits, while prices of corn and vegetables declined on year-on-year terms. On the other hand, non-food inflation was broadly steady at 0.4% in June from 0.3% in May. Inflation for housing, water, electricity, gas, and other fuels continued to post a decline due to downward adjustments of domestic petroleum prices and electricity rates during the month. Meanwhile, inflation for water supply and miscellaneous services related to dwelling went up due to higher water charges imposed in June.

Governor Amando M. Tetangco Jr. said that the BSP will continue to monitor evolving price and output conditions to ensure price stability conducive to balanced and sustainable economic growth.