Consumer prices rose at a slow pace in June brought about by moderate rise in transport cost, the Philippine Statistics Authority (PSA) reported.
After the rate of increase in consumer prices rose at a steady pace for three straight months, the country’s headline inflation went down to 4.1 percent last month, the lowest level so far for this year.
The latest inflation rate was slower than the 4.5 percent seen in May, April and March, but quicker compared with 2.5 percent in June last year. However, it was still within the Bangko Sentral ng Pilipinas’ forecast of 3.9 percent to 4.7 percent for the month.
Despite the slowdown, the June figure kept the six-month average unchanged at 4.4 percent, above the government’s target of 2.0 percent to 4.0 percent this year.
National Statistician Claire Dennis S. Mapa said on Tuesday, July 6, that the slower inflation in June was mainly driven by lower transport cost, which considerably slowed to 9.6 percent from 16.5 percent a month ago.
In particular, the rise in tricycle fares slowed to 17.6 percent from 38.8 percent in May, while petroleum and fuels dipped to 21.5 percent from 33 percent.
Meanwhile, heavily weighted food and non-alcoholic beverages inched up last month from 4.6 percent to 4.7 percent.
Fish prices increased 8.7 percent in June from 7.8 percent, while other cereals, flour, among others were steady at 1.8 percent. Meat prices, however, went up slower from 22.1 percent to 19.2 percent.
Moreover, inflation for housing, water, electricity, gas and other fuels quickened to 2.4 percent from 2.0 percent, while rentals picked up to 1.8 percent from 1.7 percent and electricity from 0.6 percent to 1.4 percent.
In Metro Manila, inflation clocked in at 2.0 percent, slower compared with 3.6 percent in May. Likewise, consumer prices in areas outside Metro Manila dropped from 4.7 percent to 4.4 percent.
In a statement, Socioeconomic Planning Secretary Karl Kendrick T. Chua said recent policies launched by the government to increase food supply, particular pork meat, are beginning to bring down inflation.
“The declining meat inflation points to the positive effects of Executive Orders (EO) 133 and 134. These are expected to further bring down meat prices during the second half of the year,” Chua said.
Transport inflation, while continued its downtrend, remained elevated primarily because of social distancing measures and the recovery of global oil prices, Chua said.
But he assured that transport cost is expected to “partially decrease” in the near term with the government’s accelerated vaccination program.
Meanwhile, Nicholas Mapa, ING Bank senior economist, said that June inflation was lower than market expectation, with transport cost making a “big surprise” deceleration during the month.
However, Mapa said that food prices, particular meat, remained “stubbornly high,” but are expected to decline in the last six-months of the year.
“With price pressures fading, we expect inflation to decelerate in the second half of the year as meat prices normalize with authorities allowing higher import volumes for the commodity,” Mapa said.
“Meanwhile, base effects tied to social distancing guidelines for transport and other services are also likely to fade in the coming months, offsetting a projected acceleration in utility and fuel costs given the surge in global oil prices,” he added.