Inflation eases to over 5-year low

HEADLINE INFLATION eased to an over five-year low in May, as utility costs rose at a slower pace, the Philippine Statistics Authority (PSA) said on Thursday.

- By Luisa Maria Jacinta C. Jocson Senior Reporter

The consumer price index (CPI) rose to 1.3% in May, slowing from 1.4% in April and 3.9% in the same month a year ago, preliminary data from the PSA showed.

This matched the 1.3% median estimate yielded in a Business World poll of 17 analysts conducted last week and was within the Bangko Sentral ng Pilipinas’ (BSP) 0.9%-1.7% forecast range for the month.

The May print was the lowest inflation rate in five and a half years, or since the 1.2% print posted in November 2019.

May also marked the fourth straight month of deceleration and tenth straight month of inflation settling within the 2-4% target band.

For the first five months, inflation averaged 1.9%. The BSP expects inflation to settle at 2.3% for the full year.

Core inflation, which discounts volatile prices of food and fuel, was steady at 2.2% in May from a month ago. This brought year-to-date core inflation to 2.3%.

"The latest inflation outturn is consistent with the BSP's assessment of a manageable inflation environment over the policy horizon with a downward revision in baseline inflation forecasts," the central bank said, noting the continued easing of commodity price pressures.

National Statistician Claire Dennis S. Mapa said the deceleration in the May print was mainly due to the slower annual increment in the index of housing, water, electricity, gas and other fuels.

The index, which accounted for a 68.4% share to the downtrend during the month, eased to 2.3% in May from 2.9% in April. It was also the top index contributing to May inflation, accounting for a 37.1% share.

Electricity inflation slowed to 2.8% in May from 5.4% a month ago.

After three months of straight hikes, Manila Electric Co. lowered the overall rate for May by PO.7499 per kilowatt-hour (kWh) to P12.2628 per kWh from P13.0127 per kWh in April.

Water costs also eased to 5.7% in May from 6.3% in the previous month.