Philippines Inflation June 2022

Philippines

Philippines: Inflation rises in June to highest level since October 2018

July 5, 2022

Consumer prices recorded 0.97% growth over the previous month in June, which was higher than May's 0.53% increase.

Inflation rose to 6.1% in June from May’s 5.4%. May's reading represented the highest inflation rate since October 2018. Meanwhile, the trend increased, with annual average inflation coming in at 4.1% in June (May: 3.9%).

Official core inflation figures were not published due to the recent rebasing of the consumer price index.

Commenting on the inflation outlook, analysts at ING said:

“June inflation hit 6.1%YoY, accelerating at a pace not seen since 2018. Back then, the central bank was facing surging inflation caused mainly by rice shortages (rice constitutes 10% of the CPI basket). This time around, Bangko Sentral ng Pilipinas (BSP), is facing inflation driven by a host of factors including elevated energy and wheat prices coupled with resurgent domestic demand. Food inflation was the main driver for the June reading, accelerating by 6.0%, followed by transport which rose sharply by 17.1%. All items outside of the information and communication subsector saw faster price increases as the inflation bug starts to feed through to the rest of the CPI basket. Second-round effects in the form of wage and transport fare adjustments have been granted and will only fan inflation further in the medium term. This is no longer simply a transport cost issue.”

FocusEconomics Consensus Forecast panelists expect inflation to average 4.6% in 2022, which is up 0.1 percentage points from last month’s forecast, and 3.6% in 2023.


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