June inflation sinks to 2.7%
The Philippines has reached its lowest inflation rate since August 2017. Inflation numbers have decelerated to 2.7% year-on-year in June 2019. May closed with an inflation rate of 3.2%. The 2.7% for June is the slowest rate of increase of prices for basic commodities in 22 months. The number is also right within range of what the Bangko Sentral ng Pilipinas (BSP) predicted.
PSA data released last Friday showed this development, and notes that this slowdown was mainly due to the drop in food inflation due to lower rice and corn prices. In addition, petroleum and fuel, as well as air fare also contracted, contributing to this drop in inflation.
Dennis Mapa, Philippine Statistics Authority (PSA) Head, notes that rice prices continued to decline, posting a 1.7% year-on-year drop to sustain May’s 0.9% decline. He explains that this is due to the implementation of the Rice Tariffication Law, which was a major contributor to lower prices of the Filipino staple.
In addition, Mapa mentioned education costs declining 4.5% this June. This is as students at State Universities and Colleges also have been enjoying the free tuition program.
Outside of NCR
The highest annual rate for regions outside the NCR is the MIMAROPA Region, at 5.2% for the month. The number is higher than the 4.7% annual rate recorded in the previous month.
Meanwhile, the lowest inflation outside NCR is still observed in the Zamboanga Peninsula (Region IX), at 0.7% this June, which is lower than the 1.5% recorded last month.
Aside from the MIMAROPA Region, all regions outside NCR also recorded lower inflation rates.
Mapa explains that the rates in the coming months are expected to be at the same level as this one recorded in June, since it was in the second half of last year that inflation surged. In June 2018, the headline rate breached the 5% level due to several factors, including higher excise taxes, elevated global prices, and bottlenecks on domestic food supply.