MANILA -- Actual inflation rate in June exceeded the government’s outlook as it stood at 5.2 percent, a record-high in more than five years.
Data released by the Philippine Statistics Authority (PSA) Thursday showed that price pressures accelerated faster than May 2018’s rate of 4.6 percent.
“It was primarily brought about by higher annual rate posted in the heavily-weighted food and non-alcoholic beverages index at 6.1 percent,” the PSA explained.
For food items alone, index went up to 5.8 percent in June mainly contributed by higher prices of corn with inflation rate of 14.1 percent; vegetables, 8.6 percent; meat, 5 percent; and rice, 4.7 percent.
Other contributors to higher inflation last month were alcoholic beverages and tobacco which rose 20.8 percent; transport, up 7.1 percent; and housing, water, electricity gas, and other fuels, up 4.6 percent.
With the opening of classes last month, education component also increased by 4 percent.
Earlier, the Department of Finance projected inflation at 4.9 percent, while the Bangko Sentral ng Pilipinas has seen last month’s price pressures’ rate within 4.3 percent to 5.1 percent.
Department of Trade and Industry (DTI) Secretary Ramon Lopez told reporters Thursday that his office continues to monitor closely the prices in the market.
Lopez mentioned that based on the PSA data, agricultural products have mainly contributed to the price pressures last month.
This is also true based on the price monitoring of basic and prime commodities conducted by DTI, since only 10 out of 98 basic necessities have increased their prices.
Meanwhile, IHS Markit Chief Economist for Asia Pacific Rajiv Biswas said in an e-mail that the 5.2-percent inflation rate in June may prompt the Bangko Sentral ng Pilipinas (BSP) to implement another policy rate hike.
“The further surge in the headline CPI (consumer price index) inflation rate to 5.2 percent in June puts further pressure on the BSP to hike policy rates again,” said Biswas.
“The BSP is facing a perfect storm of pressures to hike policy rates further, as a result of rising CPI inflation, as well as the impact of the widening current account deficit and rising US Fed policy rates that have resulted in peso depreciation,” he added. (PNA)
