Poll: Inflation likely picked up in June

Headline inflation may have slightly picked up in June as stable food prices helped offset the spike in fuel prices, analysts said.

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A BusinessWorld poll of 17 analysts yielded a median estimate of 1.5% for June inflation, accelerating from the 1.3% in May but still below the Bangko Sentral ng Pilipinas' (BSP) 2-4% target range.

If realized, this would be the fastest clip in three months or since the 1.8% in March. However, it would be slower than the 3.7% print in June 2024.

Analysts' June inflation rate estimates

The Bangko Sentral ng Pilipinas (BSP) will release its month-ahead inflation forecast for June on Monday, June 30.

The June inflation data will be released by the Philippine Statistics Authority (PSA) on July 4.

Maybank Investment Banking Group Economics Research gave a June inflation forecast of 1.5%, citing a slower rise in food and power costs.

"Factors include sustained low inflation in key groups such as food and electricity which may offset some upside pressures from the increase in fuel cost in the last two weeks of the month due to rise in global fuel prices given the escalation in the Middle East conflict," Maybank said.

Moody's Analytics economist Sarah Tan, who expects inflation to have settled at 1.4% in June, said inflation in the food basket likely remained stable, "supported by a modest decline in rice prices."

The PSA reported that rice prices declined further in June with regular milled rice averaging P42.77 per kilo from the P43.32 per kilo in mid-May.

"Our food-price tracker suggests that food inflation fell further — close to zero — but this should be offset fully by a temporary rebound in housing and utilities inflation to over 3%," Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said.

Aris D. Dacanay, an economist for ASEAN at HSBC Global Research, noted that electricity rates in Metro Manila declined by 0.9% month on month in June due to lower generation charges.