‘No sharp dips or surges in June inflation’

Inflation

THE growth of consumer prices in the Philippines is expected to have stayed broadly level in June this year, as higher prices of key fuel and food items will be offset by lower utility rates during the month, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.

In a message to reporters, BSP Governor Benjamin Diokno said their Department of Economic Research (DER) projects inflation to settle within the range of 1.9 percent and 2.7 percent for June. This is the same range he gave for the May 2020 inflation, which eventually hit 2.1 percent during the month.

“Higher gasoline, diesel and kerosene prices, as well as the uptick in the price of rice due to supply bottlenecks, contributed to positive price pressures during the month. These could be partly offset by slightly lower LPG price and electricity rate in Meralco-serviced areas during the month,” Diokno told reporters.

“Looking ahead, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” he added.

Since the start of the year, inflation has been on a downward trend, starting off at 2.9 percent in January. In March, the onset of Covid-forced restrictions that shuttered most businesses, inflation hit 2.5 percent.

The BSP’s latest inflation projects an average inflation of 2.2 percent for this year and 2.5 percent for next year. Inflation currently averages at 2.5 percent, based on data for the first five months of the year. This means the BSP expects slower inflation numbers in the second half of 2020.

Elsewhere, inflation is also falling due to the dismal demand because of Covid-19 disruptions.

Thailand’s inflation rate fell to -3.4 percent in May, falling steeper than its -3-percent inflation in April. Malaysia’s inflation rate is also within the negative territory at -2.9 percent in May.

Singapore’s overall inflation also fell below zero for the first time since 2016, at -0.8 percent.

Indonesia’s inflation in May, meanwhile, fell to 2.2 percent during the month despite a month of “traditionally faster inflation due to a holiday,” according to ING Bank senior economist Nicholas Mapa.

Bucking the trend is Vietnam, whose inflation rose 3.17 percent in June, from the 2.4 percent in May this year, signalling recovering economic activity in the country.

Image credits: Junpinzon | Dreamstime.com



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