The country’s headline inflation eased to 3.7% percent in June on the back of a slower increase in electricity and transport costs, the Philippine Statistics Authority said on Friday, July 5.
Data from the state-run statistics bureau showed that the country’s headline inflation eased in June 2024 from 3.9% in May and 5.4% in June 2023.
The June headline inflation print was the slowest pace in four months or since the 3.4% clip in February and also matched the 3.7% print in March.
Core inflation, which excludes volatile prices of food and fuel, was steady at 3.1 percent in June but slowed from 7.4 percent a year earlier.
PSA Chief and National Statistician Claire Dennis Mapa attributed cooling inflation in June to the slower increase in the housing, water, electricity, gas and other fuels index.
In a press briefing, Mapa said the sharper deflation in electricity significantly contributed to the slowdown at -13.7 percent in June from -8.5 percent in May.
For context, residential consumers supplied by Manila Electric Co. (Meralco) saw a P1.9623 per kWh decrease in rates last month.
This follows a May directive from the Energy Regulatory Commission requiring all distribution utilities and electric cooperatives to establish a phased payment schedule for their purchases from the Wholesale Electricity Spot Market.
Mapa also mentioned that transport inflation decelerated to 3.1 percent from 3.5 percent due to lower inflation rates in personal transport and gasoline.
Restaurants and accommodation services with 5.1 percent inflation in June, down from 5.3 percent in the previous month, also contributed to the lower inflation.
Food inflation, meanwhile, increased to 6.5% in June from 6.1% in May, while the price of rice decreased to 22.5% from 23% in May, which is the third consecutive month of slower rice inflation.
Rice accounted for 45.2% of total inflation, or 1.7 percentage points (ppt).
Data from the PSA showed that the average cost of a kilogram of well-milled rice decreased to P55.96 in June from P56.06 in May.
The price of regular milled rice increased to P51.07 in June from P51.03 in May and the price of special rice increased to P64.56 in June from P64.41 in May.
The Department of Agriculture had earlier said that the Executive Order No. 62, which President Ferdinand R. Marcos, Jr. signed last month, reduced import duties on rice to 15% from 35% until 2028. This action is anticipated to lower retail rice prices by P6 to P7 per kilogram.
“The reduction in the price of rice will definitely have an impact on the food inflation and the overall inflation. But we will have to wait,” Mapa said.
Mapa also mentioned that the effects of the recent wage boost on inflation may be visible in the upcoming months.
The Regional Tripartite Wages and Productivity Board (RTWPB) last week approved a P35 increase in the minimum wage for workers in the National Capital Region (NCR), which is scheduled to go into effect on July 17.
“We’ve seen before the impact of a wage hike on prices of services. We need to study what are the lag effects, but we have seen in the past that there is an impact on selected commodity groups, in particular, personal care and miscellaneous goods and services,” Mapa said. (TCSP)
