The rate of increase in the prices of goods and services commonly purchased by households may have slowed down once again in June, settling within the range of 5.3 percent to 6.1 percent, according to the Bangko Sentral ng Pilipinas (BSP).
Based on the BSP’s forecast, the midpoint of the range is 5.7 percent, suggesting that inflation is expected to have eased from 6.1 percent in May. This would mark the fifth consecutive month of decreasing inflation since reaching a high of 8.7 percent in January.
The Philippine Statistics Authority (PSA) will officially announce the inflation data on July 7.
Furthermore, the PSA reported that the growth rate of factory-gate prices decreased for the eighth consecutive month in May, reaching 2 percent. This slowdown was primarily driven by the declining prices of food products.
READ: PH inflation rate for May 2023 slows down further to 6.1%
Downward price pressures
According to the BSP, lower prices of meat, fruits, and LPG, could contribute to downward price pressures in June.
However, the increase in prices of key food items such as rice, vegetables, and fish, along with the rise in domestic oil prices and electricity rates, as well as the depreciation of the peso, are the main sources of upward price pressures in June.
READ: Rice prices surge as production costs rise
The BSP aims to maintain inflation at an average of 3 percent or within the range of 2 percent to 4 percent for the full year. However, from January to May, the average change in the consumer price index was 7.5 percent, indicating a higher-than-desired inflation rate.
In addition, the latest data on prices of manufactured goods show a steady decline in the producers price index (PPI) since September 2022, when it registered at 7.7 percent.
Manufacturing inflation
In April, manufacturing inflation was recorded at 2.3 percent.
The slower annual growth rate of PPI in May 2023 compared to April 2023 was primarily due to the deceleration in the annual increase in the manufacture of food products industry, which decreased to 3.7 percent in May from 4.7 percent. The manufacture of food products carries the highest weight in the computation of the PPI and accounted for 37 percent of the slower year-on-year price growth in May.
The increase in prices of food products leaving factories also slowed down to 3.7 percent in May from 4.7 percent in April. Other contributors to the slower growth of factory prices in May were the manufacture of coke and refined petroleum products, and manufacture of transport equipment.
In May, manufacturing activities in the Philippines experienced a faster expansion, reaching an eight-month high, as both new orders and production grew at quicker rates, according to S&P Global Market Intelligence.
READ: PH factory activity expansion accelerated in May
The company reported that the purchasing managers index for the Philippines indicated growth for the 16th consecutive month in May, supported by a solid rise in both output and factory orders.
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Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
