Philippine Headline Inflation Eases in June

Headline inflation eased to 2.8 percent year-on-year in June from 3.1 percent in May, but was within the BSP’s forecast range of 2.4-3.2 percent for the month. It should be noted however that June CPI figures were adjusted to exclude Lanao del Sur. Meanwhile, the resulting year-to-date average inflation rate of 3.1 percent was also in line with the Government’s target range of 3.0 percent ± 1.0 percentage point for 2017. Similarly, core inflation—which excludes certain volatile food and energy items to measure underlying price pressures—decelerated to 2.6 percent in June from 2.9 percent in the previous month. On the other hand, seasonally-adjusted month-on-month headline inflation fell to -0.1 percent in June from 0.1 percent in May.

Headline inflation was lower in June due largely to slower price increases of selected food and non-food items. In particular, food inflation eased as key food items namely, fruits, vegetables, milk, cheese, and eggs as well as oils and fats¬—posted lower year-on-year inflation rates during the month. At the same time, non-food inflation decelerated as a result mainly of the downward adjustment in electricity charges and price reductions in petroleum domestic products namely, gasoline, kerosene, and diesel products. –

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