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May Inflation Rate Falls Within Government Target Range of 2-4 Percent

06.05.2019

Headline inflation increased to 3.2 percent year-on-year in May 2019 from 3.0 percent in the previous month. The resulting year-to-date average of 3.6 percent remains within the Government’s inflation target range of 3.0 percent ± 1.0 percentage point for the year. Core inflation—which excludes selected volatile food and energy items to measure underlying price pressures—was also higher at 3.5 percent in May from 3.4 percent in April.

The uptrend was also seen on the month-on-month seasonally-adjusted headline inflation which rose to 0.3 percent in May from 0.2 percent in the previous month.

Year-on-year inflation rate of food items increased in May as prices of fish, fruits, and vegetables rose due to dry weather conditions. This was partly tempered by the decline in corn and rice prices compared to year-ago levels.

Meanwhile, the uptick in non-food inflation could be attributed to higher year-on-year inflation of housing, water, electricity, gas, and other fuels. The price rollback of most domestic petroleum products during the month helped offset the upward adjustment in public utility jeepney fares in some provinces.

The inflation outturn for May 2019 continues to be in line with the BSP’s current assessment that inflation will settle within the target range of 3.0 percent ± 1.0 percentage point for 2019 and 2020. Looking ahead, the BSP will continue to monitor evolving price trends to ensure that the monetary policy stance remains consistent with its price stability objective.

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