Inflation slows to 2.1% in May 2020
MANILA, Philippines (UPDATED) – Inflation slightly went down to 2.1% in May 2020, the Philippine Statistics Authority announced on Friday, June 5.
The latest figure is lower than the 2.2% registered in April 2020 and the 3.2% recorded in May 2019.
Year-to-date inflation now stands at 2.5%.
Lower transportation costs and food prices caused the downtrend.
On the contrary, alcoholic beverages and tobacco posted higher prices during the period.
Inflation in the National Capital Region (NCR) was higher at 1.4% from April's 1.2%.
For areas outside NCR, inflation eased to 2.2% from 2.5% in April.
A total of 11 regions had lower inflation in May compared to April, with Northern Mindanao posting the lowest at 1%.
ING Bank Manila senior economist Nicholas Mapa said low inflation gives the Bangko Sentral ng Pilipinas (BSP) more elbow room to cut policy rates amid the need to provide additional stimulus.
Mapa said the BSP will likely carry out a 25-basis-point cut before pausing for the rest of the year to keep real policy rates positive.
BSP economists earlier projected that higher domestic oil prices, as well as the uptick in prices of agricultural goods due to Typhoon Ambo (Vongfong), contributed to upward pressures in inflation. (READ: Farmers trash spoiled vegetables while poor go hungry)
But lower electricity rates due to the averaging scheme by power companies likely pushed inflation down, despite higher consumption in households during the lockdown.
The government projects inflation to settle from 1.8% to 3.8% in 2020. – Rappler.com