Philippines Inflation June 2019


Philippines: Inflation decelerates in June

July 5, 2019

Consumer prices rose 0.08% over the previous month in June, down from the 0.17% increase in May. The softer uptick in consumer prices was principally driven by a sharp fall in transport costs while the increase in prices for food and non-alcoholic beverages slowed.

Inflation weakened to 2.7% in June from 3.2% in May, remaining within the Central Bank’s target band of 3.0% plus or minus 1.0 percentage point. Core inflation, which excludes volatile food and energy prices, eased to 3.3% in June from 3.5% in May, while annual average inflation edged down to 4.8% in June from 5.0% in May.

Commenting on the implications of slowing inflation on the Central Bank’s monetary policy stance, analysts at Nomura noted:

“Falling inflation allows BSP to focus on supporting growth, particularly at a time when fiscal spending has stalled as a result of the budget delay, adversely affecting GDP growth in Q1 and likely dragging it down into Q2 with the government running another fiscal surplus in May. We believe the slow recovery of fiscal spending in Q2 will prompt more rate cuts by BSP near term in a bid to support growth and offset some of the fiscal drag.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.2% in 2019, which is down 0.1 percentage points from last month’s projection. For 2020, panelists see average inflation of 3.4%.

Author:, Economist

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Philippines Inflation Chart

Philippines Inflation June 2019 3

Note: Annual and monthly variation of consumer price index in %.
Source: Central Bank of the Philippines (BSP) and FocusEconomics calculations.

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