Wednesday, 8 July 2009

Philippine Inflation Drops Further to 1.5 Percent in June

Bangko Sentral
Media Releases

Headline inflation continued to fall in June, dropping to 1.5 percent year-on-year from 3.3 percent in May, the lowest in more than 22 years. This brings the year-to-date average down to 5.0 percent from 5.7 percent a month earlier. Likewise, core inflation, which excludes specific food and energy items to measure generalized price pressures, was lower at 3.9 percent year-on-year in June from 4.4 percent in May. Meanwhile, month-on-month headline inflation was 0.6 percent in June compared to negative 0.1 percent in May.

All major commodity groups registered either lower or negative inflation rates in June. Lower food inflation accounted for the bulk of the decline in headline inflation, with lower rice and corn prices and slower price increases year-on-year in fruits and vegetables, fish, and miscellaneous food. In addition, fuel prices were lower in June along with rentals inflation. Services inflation turned negative as educational services inflation slowed down and as transportation and communication services inflation turned even more negative.

BSP Officer-in-Charge Armando L. Suratos noted that the inflation outturn was within the 1.2-2.1 percent forecast of the BSP for June. He also added that while inflationary pressures have slowed down in recent months owing to lower oil and other commodity prices due in large part to subdued demand conditions, the BSP will continue to watch closely the evolving conditions so that it can respond quickly to any emerging threats to the price stability objective.

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