June inflation up 5.2%, fastest level in 5 years
Inflation just continued to accelerate further. In June, it rose for the sixth straight month at 5.2 percent, its fastest level in over five years, pushed by higher price increases in food and "sin" products.
In a report released yesterday, the Philippine Statistics Authority noted the 5.2 percent inflation was due mainly to the 6.1 percent increase in prices of food, non-alcoholic drinks. Prices of alcoholic drinks, tobacco, water, electricity and fuel also increased.
"It was primarily brought about by higher annual rate posted in the heavily-weighted food and non-alcoholic beverages index at 6.1 percent," PSA said.
The rise in consumer prices was the fastest since at least January 2013.
The June inflation, up from 4.6 percent in May and 2.5 percent in June 2017, was the fourth straight month that it breached the top end of the Bangko Sentral ng Pilipinas' 2-4 percent target for the full year.
Last month's rise in consumer prices was above BSP's 4.3-5.1 percent forecast.
The inflation outlook continues to be a concern and critics have blamed the rising prices to the Tax Reform for Acceleration and Inclusion (TRAIN) law which imposes higher taxes on fuel and sweetened beverage products.
Earlier, Cebuano economist Fernando Fajardo pointed out the poor are the most affected by the rising prices.
He added the faster rise in transport costs is also hurting consumers.
Fajardo had said price pressure concerns have remained.
In a statement yesterday, the central bank said it is set to review its inflation forecast, after the June inflation breached the 5 percent mark.
The higher-than-expected inflation last month is a setback, said BSP Governor Nestor Espenilla.
The BSP has assured its strong commitment to ensure that inflation returns to within the 2-4 percent target range as soon as possible.
The BSP has retained its 2-4 percent target range for the full-year 2018 but it expects inflation to settle at 4.5 percent this year, within the 4-4.5 percent revised forecast of the Development Budget Coordination Committee.
Last month, the BSP had raised interest rates for the second time in 6 weeks mainly to tame inflation.
The central bank next meets to review monetary policy on Aug. 9.
In early trading yesterday, the Philippine Stock Exchange index was down 1.23 percent, breaking a 4-day winning streak after the inflation data was released.
The peso also opened weaker against the dollar at P53.41 from P53.36 on Wednesday.