High power rates, fuel prices cause 3.9% uptick in inflation in May

MANILA, Philippines — High power rates and fuel prices, as well as transport costs pushed inflation to slightly higher last month, the Philippine Statistics Authority (PSA) reported on Wednesday.

For four consecutive months, inflation picked up in May to 3.9 percent from April's 3.8 percent. This is markedly lower than the 6.1 percent recorded in the same month last year.

It is well within the 3.7- to 4.5-percent estimate of the Bangko Sentral ng Pilipinas (BSP) for the month and lower than the 4.0-percent median in a Manila Times poll of economists.

Despite the uptick, rates remained within the central bank's 2.0-to 4.0-percent target for the sixth straight month.

«The uptrend in the overall inflation in May 2024 was primarily influenced by the higher year-on-year increase in the index of the housing, water, electricity, gas and other fuels at 0.9 percent during the month from 0.4 percent in April 2024,» the PSA said in a statement.

The uptrend was also fueled by the 3.5 percent rise in transport from 2.6 percent in April.

Food and alcoholic beverages still accounted for over half — 56.6 percent share or 2.2 percentage points — of overall inflation.

Food inflation, meanwhile, slowed to 6.1 percent in May from the previous month's 6.3 percent.

Rice inflation—which contributed to the uptick in inflation from the previous months—declined anew to 23.0 percent last month from 23.9 percent in April.

Core inflation, which excludes volatile food and energy items, further decelerated in May to 3.1 percent from the 3.2 percent seen in the previous month and 7.7 percent a year earlier.

Year to date, headline inflation and core inflation were recorded at 3.5 percent and 3.4 percent, respectively. Both are still within the central bank's target range for the year.