Low commodity prices are likely to continue in the coming months as the Philippine June headline inflation registered an all-time low rate at 2.7 percent, lowest rate recorded since September 2017.
Coinciding with the Bangko Sentral ng Pilipinas (BSP) projections, the downward trend in the country’s consumer price was 0.5 percent lower from the 3.2 percent inflation last May and 2.5 percent lower from the 5.2 percent recorded rate in the same month last year.
Initially, the Department of Economic Research of the central bank projected the June 2019 inflation to settle within the range of 2.2 to 3 percent.
Citing “base effects” from last year’s price spikes, BSP Governor Benjamin Diokno, in an interview on Wednesday, said the government remained optimistic the country could still hit an even lower bound in the coming months.
In a press briefing on Friday, National Statistician Claire Dennis S. Mapa said the main factor for the deceleration in inflation last month was the 2.7 percent annual rate posted in the index of heavily-weighted food and non-alcoholic beverages, comprising 39.8 percent of the overall inflation.
Specifically, Mapa said items under the Food and Non-Alcoholic beverages sector that fueled the consumer price decline were vegetables (9.5 percent inflation, 28.1 percent share), fish (3.8 percent inflation and 24.8 percent share) and meat (3.3 percent inflation and 23.5 percent share).
In terms of housing, water, electricity, gas and other fuels index, Mapa reported actual rentals, electricity and fuelwood as the main growth contributors in the sector as these posted a 3.0 percent growth and 25.4 percent overall share in inflation.
Mirroring the inflation at the national level, consumer prices in Metro Manila moved at a slower pace of 3 percent, 0.4 percent slower than the posted 3.4 percent in the previous month.
Mapa disclosed that this was due to the lower rates registered in the indices of all sectors except for the indices of alcoholic beverages and tobacco; communication and restaurant and miscellaneous goods and services.
In areas outside Metro Manila, inflation eased to 2.6 percent in June, 0.5 percent lower than the 3.1 percent reported in May.
Relative to their annual rates in the previous month, all regions outside Metro Manila also had lower inflation in June, except MIMAROPA region.
Meanwhile, Zamboanga Peninsula had the lowest consumer price at 0.7 percent.
Despite a slowdown in inflation in June, market watchers and several analysts warned that the government should reinforce concrete actions to lower prices in the country.
Last May, the BSP slashed interest rates by 25 basis points (bp) to 4.5 percent and announced its reserve ratio requirement (RRR) cut by 200 bp to be completed on 26 July.