THE country’s inflation rate was steady at 4.5 percent for the third consecutive month, according to the Philippine Statistics Authority (PSA).
The PSA data showed inflation at the same rate since March. However, inflation in May 2021 was still higher than the 2.1 percent posted in May 2020.
In a briefing on Friday, National Statistician Claire Dennis S. Mapa told reporters this was the first time when inflation was at the same rate for three consecutive months.
“Movements of prices in the 11 commodity groups are different. There are prices that increased, there are prices that decreased,” Mapa said.
He explained that while there were price decreases in some commodities with higher weights in the Consumer Price Index (CPI), there are also commodities which saw increases and this kept inflation at the same rate for the past three months.
Mapa said inflation of food and non-alcoholic beverages averaged 4.6 percent which accounted for 39.5 percent of May 2021 inflation.
This was mainly driven by meat prices which posted a growth of 22.1 percent in May 2021. Meat inflation, Mapa said, has been increasing in double digits since December 2020.
Meat prices steadily increased from 10 percent in December 2020 to 17.1 percent in January 2021; 20.7 percent in February; 20.9 percent in March; and 22.1 percent in April and May.
For May, Mapa said, pork prices grew 58.4, making this the main driver of meat prices. Beef and chicken prices, however, also recorded double-digit increases at 13.2 percent and 12.6 percent, respectively.
However, other food items posted contractions in prices in May 2021. Rice prices, which have a weight of 9.59 percent in the Consumer Price Index (CPI), contracted 0.8 percent in May.
Fruits and vegetables also contracted in May 2021– fruits contracted 1.1 percent while vegetables, 6.6 percent.
Meanwhile, other commodity groups moved up at a faster pace in May 2021. These included clothing and footwear, 1.7 percent; and housing, water, electricity, gas, and other fuels, 1.9 percent.
The list includes furnishing, household equipment and routine maintenance of the house, 2.5 percent; health, 3.2 percent; and restaurant and miscellaneous goods and services, 3.8 percent.
PSA noted the inflation decelerated further in the indices of food and non-alcoholic beverages at 4.6 percent; and alcoholic beverages and tobacco, 11.8 percent.
Likewise, PSA said the double-digit annual hike in the index of transport slowed down to 16.5 percent during the month.
“There were mixed movements in the annual growth rates in the indices of the commodity groups in May 2021,” PSA said.
NCR inflation slows
Meanwhile, inflation in the National Capital Region (NCR), however, slowed down to 3.6 percent in May 2021, from 3.7 percent in April 2021.
In May 2020, PSA said inflation in Metro Manila was at 1.4 percent. PSA said the index of recreation and culture continued to move downward as its annual rate fell further to -0.5 percent during the month.
Following the trend at the national level, inflation in Areas Outside NCR (AONCR) in May 2021 remained at 4.7 percent, which was the inflation rate in the area since March 2021. In May 2020, inflation in AONCR was recorded at 2.3 percent.
Among the regions in AONCR, Region V (Bicol Region) still exhibited the highest inflation during the month at 7.5 percent. Meanwhile, the lowest inflation remained in Region VII (Central Visayas) at 2.1 percent.
BSP ‘still watchful’
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno vowed to still be watchful of emerging price developments, even after the Philippine Statistics Authority (PSA) announced that inflation was broadly steady in May.
In a message to reporters on Friday, Diokno said the Monetary Board will consider the latest price developments during its meeting on 24 June 24.
The PSA’s reported inflation rate of 4.5 percent in May is still within the forecast range of 4 to 4.8 percent by the BSP.
“The BSP remains watchful over the evolving economic conditions and challenges brought about by the pandemic to ensure that the monetary policy stance remains consistent with its price and financial stability objectives,” Diokno said.
The governor said the inflation outturn is consistent with their expectations that inflation could remain above the high end of the target range during the quarter, as meat and oil prices remain elevated.
The BSP’s inflation average forecast for the year is at 3.9 percent. The target band is at 2 to 4 percent.
“Nonetheless, the BSP expects inflation to decelerate to within the target range by the second half of 2021 to 2022 as domestic supply bottlenecks are addressed,” Diokno said.
“The BSP is of the view that risks to the inflation outlook are broadly balanced. The risks relate to the arrival of pork imports at lower tariffs, the successful reopening of the domestic economy, and the pace of the global economic recovery,” he added.
Image credits: Nonie Reyes