go through Luisa Maria Jacinta C. Josen, Senior Reporter
Title Inflation May May further slowed its five-year lows of more than five years amid continued decline in food prices and stronger peso.
one BusinessWorld The median estimate of the May Consumer Price Index (CPI) was slower than 1.4% in April and 3.9% slower in the same month a year ago. This is 0.9%-1.7% in Sentral Ng Pilipinas (BSP) this month.
If achieved, this would be the lowest clip in more than five years or since November 2019 1.2%.
The Philippine Bureau of Statistics is scheduled to release May inflation data on Thursday (June 5).
Emilio S. Neri, chief economist at the Bank of the Philippines Islands. “We expect inflation to drop slightly to 1.3% from 1.4% in April, which means a monthly decline of 0.1% per month,” said the company.
“The continued decline in rice prices, coupled with lower energy and fuel costs, remains the main The driver of dissolution. ” he said.
Inflation could drop to 1.3%, “because of lower prices of food and agricultural products, the cost of transportation is lower.”
“This adds to the continued appreciation of the peso’s dollar, resulting in lower prices for imported products,” he added.
Sun Life Investment Management and Trust Corp. economist Patrick M. Ella said the slower inflation rate in May was probably due to “a favorable food price decline and a stable non-food price similar to the past two months.”
“The continued decline in rice prices and a decline in oil costs may put inflation below the BSP’s target of 2-4%” added Alvin Joseph A. Arogo, an economist at the National Bank of the Philippines.
In April, rice inflation fell by 10.9% from 7.7% in March.
The latest data shows that the average price of a kilogram of regular rice nationwide fell 13.3% year-on-year to P44.45 in April, while the average price of mimi mi fell 10.4% to P50.54. The special rice dropped by 6.2% to P60.69 per kilogram.
“With better weather conditions that can support better harvests, food supply is expected to improve. This should lead to steady retail price growth,” said Sarah Tan, an analytical economist at Moody.
“As for utilities, May lowered the power rate, which will provide relief for homes and businesses,” Ms Tan added.
After three months of direct rebate, Manila Electric Co.
Aris D. Dacanay, an economist at HSBC’s global research, said strong peso and reduced global oil prices have lowered energy costs.
The peso ended in May at P55.745 per dollar, strengthening 9.5 Centavos from the April P55.84 end.
Chinabank Research, on the other hand, marks the price pressures of key foods (such as meat, vegetables, fruits and eggs), although these may be offset by lower prices for rice, fish, sugar, sugar, and electrical.LPG.
Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co., said rising pressures on meat prices and utility costs could have boosted headline inflation last month.
Oikonomia Advisory & Research, Inc. “During this period, the prices of certain livestock and vegetable items rose, but these prices were lowered by oil prices in the global market and reduced power generation,” added economist Reinielle Matt M. Erece.
Mr Neri also noted that “the rebound in the prices of vegetables and fruits during the ongoing dry seasons has greatly reduced agricultural output.”
“In addition, the highest suggested retail price of pork (MSRP) has boosted the increase in meat prices that month,” he added.
Ruben Carlo O. Asuncion, chief economist at United Bank of Philippines, said title inflation could bottom out in May, could hit a 1.9% rate in August of the typhoon season and violate 2% violations for the remainder of the time, adding that they expect CPI’s CPI to be 2.6% on the anniversary.
The central bank expects inflation to average 2.3% this year and 3.3% in 2026, both within the target range of 2-4%.
“Title inflation is expected to remain soft in the coming months, which is largely supported by continued softness in major commodity prices and a high base from last year,” Mr Neri said.
He added: “However, the favorable basic effects (especially for rice) are expected to decrease from September. This may gradually quantify the title print (if not, if not, reach 3%).”
May reduce this month
Mr Neri said the current inflation trajectory shows that another rate of BSP reduction this month “looks more and more reasonable”.
“With inflation below the lower end of the BSP’s 2-4% target, we think central banks have room to lower their policy rates at their June meeting,” Chinabank Research said.
Ms Tan added: “As inflation eases and peso strengthens, BSP seems to be a suitable time.”
The Monetary Commission in April lowered the interest rate on its target reverse buyback (RRP) by 25 basis points (BPS) to 5.5%, and the total cut rate has so far reached 100 basis points since its easing cycle began last August.
The next meeting is scheduled to take place on June 19. Eli M. Remolona, Jr., Governor of BSP. It said they could cut it twice this year, but are still in the “baby step” or 25 basis points increments.
Angelo B. Taningco, vice president and head of research at the Security Bank, also expects that the Monetary Commission meeting this month will reduce interest rates by $2.5 billion in a benign inflation environment.
Mr Arogo said the continued low inflation and modest GDP growth in the first quarter were “a strong reason why BSP lowered the RRP rate further by 25 basis points on June 19.”
“This move will also provide more support to the domestic economy, which is growing more slowly than expected in the first quarter and is facing downside risks of global policy uncertainty and higher U.S. tariffs,” Chinabank Research said.
“[We] It is believed that during these challenging times, BSP has a lot of room to lower interest rates and support growth momentum. We expect up to reduce taxes this year. ” said Mr. Mapa.
The Philippines economy grew 5.4% in the first quarter.
Meanwhile, Mr Neri said BSP’s recent comments were that the regime shifting from the current scope to the target side also showed a “subtle but meaningful shift from the increasingly dirty tone of last month to a more cautious position”.
“This evolving guidance shows that while BSPs are still ready to lower interest rates in the near term, it is likely to be more measured and reliant on data, especially as the rising risk of inflation may reappear later this year, as the underlying effect is again unfavorable in 2026.”
Mr Remolona said earlier they were looking at how to move from the current target range of 2-4% to the target target of inflation. He said they are focusing on target The midpoint of the current frequency band is 3%.
“The subsequent actions of the central bank may be measured by a greater measure as external headwinds are linked to an uncertain global trade environment,” Neri added.
