The rate of increase in consumer prices accelerated to a fresh three-year high in May as the worsening inflationary pressures globally continued to eat into Filipinos’ purchasing power.

The Philippine Statistic Authority (PSA) reported on Tuesday, June 7, that headline inflation jumped to 5.4 percent last month from 4.9 percent in April. This is also well above the 4.1 percent recorded in May last year.

Socioeconomic Planning Secretary Karl Kendrick T. Chua attributed the accelerating inflation to the going Russia-Ukraine conflict, which disrupted the global supply chain and elevated commodity prices, particularly for fuel.

“We have seen how a single crisis can set us back, so the Duterte administration has pursued both short- and long-term interventions to increase the resilience of our domestic economy against external shocks,” Chua said in statement.

The latest inflation print, however, is within the Bangko Sentral ng Pilipinas (BSP) forecast range of 5.0 percent to 5.8 percent for the month, but exceeded the government’s 2.0 percent to 4.0 percent target band.

This is also the fastest since December 2018, when inflation was recorded at 5.2 percent.

Faster inflation for both food and non-food commodity groups contributed to the increase in headline inflation.

Food inflation further rose to 5.2 percent in May from 4.0 percent in the previous month due to faster price adjustments for vegetables, fish, and meat.

Corn inflation also remained high at 24.4 percent due to limited global supply. In contrast, rice inflation remained stable and decelerated to 1.5 percent.

Meanwhile, non-food inflation continued to increase to 5.6 percent in May from 5.4 percent in April, driven by transport which increased to 14.6 percent month-on-month from 13 percent due to elevated world oil prices.

Private transport inflation accelerated to 47.9 percent from 44.4 percent, while public transport remained muted at 1.6 percent due to fare regulation.

Household inflation for electricity, gas, and other fuels also remained high even with a slight deceleration at 18.8 percent from 19.9 percent.

In the first four-months of the year, inflation settled at 4.1 percent, slightly above the government’s target range of 2.0 percent to 4.0 percent for 2022.

Finance Chief Economist Gil S. Beltran had said that Filipino consumers will continue to face inflationary pressures from both food and non-food items in the coming months.

“The futures market for oil continues to be in backwardation (i.e., the spot price is higher than near-term futures contracts which are, in turn, higher than longer-term contracts), suggesting tight supply conditions and higher convenience yield associated with having on hand the physical commodity,” Beltran said.

Higher energy prices in the world market ultimately get translated into higher local pump prices, he said.