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Slower food, transport inflation balances upticks in others: PSA

The deceleration of inflation rate, which is steady at 4.5 percent in May, depends on the normalization of pork supply with the help of the temporary tariff cut on imported pork, the Bangko Sentral ng Pilipinas said*

The deceleration of food and transport inflation in May was seen as the main factor for the steady, yet elevated, rate of price increases in the Philippines.

In a virtual briefing yesterday, National Statistician Dennis Mapa said that inflation of food and non-alcoholic beverages, which accounts for 39.5 percent of the consumer price index, slowed to 4.6 percent from month-ago’s 4.8 percent.

Inflation of the alcoholic beverages and tobacco decelerated to 11.8 percent from the previous month’s 12 percent and the transport index to 16.5 percent from 17.9 percent in April.

The transport index has a share of about 29.8 percent of the overall inflation rate.

Mapa attributed the slower inflation of the transport index to changes in the tricycle fare, that posted an inflation of 38.8 percent last May from the previous month’s 48.4 percent.

In the National Capital Region alone, tricycle fare’s inflation slowed to 55.4 percent from 118.8 percent last April.

Also, petroleum and fuels’ inflation decelerated to 26.9 percent last May from month-ago’s 30.9 percent and ferry/ship fare from 55.2 percent last April to 30.5 percent.

In areas outside NCR, the transport index posted an inflation of 17.4 percent, slower than last April’s 29.5 percent.

Slower inflation of these factors in the overall index countered the jumps in the clothing and footwear index, the housing, water, electricity, gas, and other fuels, furnishing, household equipment and routine maintenance of house, health, and restaurant and miscellaneous goods and services.

Without the deceleration in the overall inflation rate, Mapa noted the slowdown of inflation on some food items like rice, other cereals, flour, bread, among others, and meat due to the contribution of the bottom 30 percent of the economic bracket.

The PSA reported that the country’s headline inflation in May remained at 4.5 percent.

Inflation rate for the bottom 30 percent income households slowed to 4.5 percent from last April’s 4.9 percent. Year-ago print is 2.9 percent.

Food and non-alcoholic beverages inflation of this group slowed to 3.4 percent last May from 3.9 percent in the previous month and transport inflation from 23.1 percent to 22.1 percent.

Mapa said that overall petroleum is part of the risk to inflation “because it will have an impact on the other commodity groups.”

Authorities have said that upticks in global oil prices along with the impact of supply constraints on pork are the major factors for the elevated domestic inflation rate.

Monetary officials expect inflation to slowdown starting in the fourth quarter of the year as pork supply stabilizes with the help of the temporary cut in pork tariff, a measure eyed to boost domestic supply and help normalize prices.*PNA

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October 2021

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