Inflation for Poor families rose to 4.6% in May

Inflation among the country’s poorest families inched up to 4.6 percent in May, cutting short six straight months of easing year-on-year price increases.

In a report on Monday, the Philippine Statistics Authority (PSA) attributed the higher inflation rate of the consumer prices index (CPI) for the bottom 30-percent income households in May mainly to faster price increases in food, beverages, tobacco, clothing and miscellaneous items.

For instance, the food index rose 4.3 percent year-on-year, faster than the 3.9 percent posted in April but slower than the 6.2 percent recorded a year ago.

In particular, dairy products, fish, fruits, vegetables and miscellaneous foods posted higher inflation in May than the previous month.

Price increases of rice, eggs and meat were nonetheless slower that month, while corn prices continued to decline.

At the end of the first five months, inflation for the bottom 30-percent income households averaged 4.9 percent nationwide, down from 5.7 percent a year ago.

The government earlier reported that headline inflation inched up to 3.2 percent in May from April’s 3 percent, blaming the uptick to base effects and the impact of the prolonged dry spell due to El Niño on the prices of food, beverages and agricultural products.

The rate of increase in prices of basic commodities averaged 3.6 percent as of end-May, within government target of 3-4 percent.

The central bank expects the Philippine economy to enjoy lower inflation this year and next due to an expected decline in average petroleum prices globally and an appreciation of the peso that will improve the buying power of importers.

Deputy Governor Diwa Guinigundo of the Bangko Sentral ng Pilipinas said last week that the monetary regulator was expecting inflation for 2019 to come in at an average of 2.7 percent, revising the 2.9 percent forecast set just last month.

The forecast for the range of increase in prices of basic goods and services for 2020 was also cut slightly to 3 percent from the previous expectation of a 3.1 percent.

The outgoing central bank deputy chief—who will reach mandatory retirement age next month—said lower crude oil prices and a stronger local currency were considered by the Monetary Board when it decided to reduce the inflation forecast during its meeting last Thursday. —BEN O. DE VERA