June’s 1.2% inflation lowest in 20 years

The country's inflation rate decelerates further to 1.2 percent in June 2015 from 4.4 percent in the same period last year, the lowest level in 20 years, according to the National Economic and Development Authority (NEDA).

“The June 2015 inflation rate is now the lowest, covering the monthly inflation series from 1995 to June 2015 using the current base year 2006. The figure was also below the market expectation of 1.5 percent and very well within the inflation target range of 2.0 to 4.0 percent set by the government for 2015,” said NEDA Deputy Director-General Emmanuel Esguerra.

Headline inflation in the food subgroup eased in June 2015 to 2.1% from 3.2% following slower price adjustments in rice, meat, vegetables and fruits.

“Aside from the steady and sufficient supply of food, inflation benefited from reduced electricity prices due to lower fuel costs. The double-digit year-on-year decline in the prices of unleaded gasoline, diesel, kerosene, liquefied petroleum gas or LPG, and the decline in Meralco rates affected key oil and electricity-related commodities and services in the current month,” said Esguerra.

On the other hand, non-food commodities reflected slight price increments as inflation partially increased to 0.4 percent in June 2015 from 0.3 percent in May 2015.

Meanwhile, core inflation, which excludes selected volatile food and energy prices, declined to 2.0 percent from 2.2 percent in May 2015 and 2.8 percent in June 2014. It averaged at 2.3 percent in the first six months of 2015.

“The slackening of the core inflation provides less pressure for interest rates to increase, and this bodes well for household consumption and further supports economic expansion moving for-