Headline inflation increased to 3.9% year-on-year in May from 3.8% in April, but still within the Bangko Sentral ng Pilipinas' (BSP) forecast range of 3.7 – 4.5 percent for the month.
The resulting year-to-date average of 3.5% was within the government's inflation target range of 3.0% ± 1.0 percentage point for the year.
On a month-on-month seasonally adjusted basis, headline inflation rose to 0.3% in May from 0.2%% in the previous month.
Meanwhile, core inflation, which excludes selected volatile food and energy items and measures underlying demand-side price pressures, eased further to 3.1% year-on-year in May from 3.2% in April.
The rise in headline inflation was primarily driven by non-food inflation, which increased due to higher electricity rates and an uptick in transport inflation. This was despite a slight easing in year-on-year food inflation, which remained elevated in May, reflecting double-digit price inflation.
The latest inflation outturn is consistent with the BSP's projections that inflation is likely to exceed the target range temporarily due to the possible impact of adverse weather conditions on domestic agricultural output and positive base effects.
Despite the temporary inflationary pressures, the BSP remains confident in its ability to manage inflation. It anticipates that full-year average inflation will settle within the target range for 2024 and 2025. The Monetary Board will carefully consider the latest inflation outturn, along with other incoming data, in its upcoming monetary policy meeting on June 27.
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