5-6-2024 (MANILA) Philippine annual inflation accelerated for the fourth consecutive month in May, driven largely by increases in housing, utilities, and transportation costs, the national statistics agency reported on Wednesday.
The consumer price index (CPI) saw a rise of 3.9 per cent in May, up from 3.8 per cent in April. This marks the fastest inflation rate since November 2023, resulting in a five-month average inflation rate of 3.5 per cent, comfortably within the central bank’s target range of 2.0 per cent to 4.0 per cent for the year.
Economists polled by Reuters had anticipated an annual inflation rate of 4.0 per cent, aligning with the central bank’s forecast range of 3.7 per cent to 4.5 per cent for May.
Core inflation, which excludes the volatile prices of food and energy, slightly decreased to 3.1 per cent in May from 3.2 per cent in the previous month.
Governor Eli Remolona of Bangko Sentral ng Pilipinas reiterated on Tuesday that there could be a reduction in the benchmark policy rate, currently at a 17-year high of 6.50 per cent, before the U.S. Federal Reserve commences its easing cycle.
The Philippine central bank, which has maintained its benchmark rate at its last five meetings, indicated a potential rate cut of 25 basis points as early as August, with a further 25 basis points reduction anticipated in the fourth quarter of the year.
