Headline inflation increased year-on-year to 4.6 percent in June from the May level of 4.5 percent, using the 2000-based Consumer Price Index (CPI) series. This was within the BSP's forecast for the month of 4.6-5.5 percent. Meanwhile, the new 2006-based CPI series released by the National Statistics Office (NSO)-which was derived using an updated consumer basket of goods and services-showed a higher headline inflation rate for June at 5.2 percent from 5.0 percent in May. The year-to-date average at 4.3 percent using the 2000 basket and 4.7 percent using the 2006 basket remain within the Government's target range of 3-5 percent for 2011. Core inflation, which excludes certain food and energy items to measure generalized price pressures, was also higher in June at 4.0 percent compared with 3.7 percent in May based on the 2000 CPI basket. On a month-on-month basis, headline inflation in June was higher by 0.4 percent and 0.5 percent, using the 2000-based and 2006-based CPI baskets, respectively, compared with zero and 0.2 percent in May.
Based on the 2006-based CPI series, higher inflation in June was traced mainly to the increase in the prices of electricity, gas and other fuels due, in turn, to the rise in international oil prices and the upward adjustment in electricity charges. Prices for most food products, including rice, meat and fish products, and fruits and vegetables also rose due to supply constraints triggered by weather disturbances during the month. The hike in tuition fees and the increase in the prices of school supplies and clothing and footwear in time for the school opening in June also contributed to the rise in inflation.
Governor Amando M. Tetangco, Jr. noted that, while price pressures are showing signs of moderation, the inflation outlook continues to be at risk given that prices of imported commodities are expected to remain elevated. He emphasized that the BSP will continue to be vigilant against any potential build-up in inflationary pressures and will calibrate its policy settings accordingly to safeguard price stability.
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