Philippine inflation eased to a six-month low in June, the Philippine Statistics Authority (PSA) reported this morning.

Preliminary data from the PSA showed headline inflation at 4.1% in June, slowing from the year-on-year rate of 4.5% in May. However, this was still above the 2.5% recorded in June last year.

The latest headline figure is lower than the 4.3% median in a BusinessWorld poll conducted late last week. Nevertheless, it fell within the 3.9%-4.7% estimate given by the Bangko Sentral ng Pilipinas (BSP) for June.

The June print was also slowest in six months, or since the 3.5% annual rate recorded in December 2020. Prior to the June result, year on year inflation remained unchanged for three straight months at 4.5%.

Year-to-date inflation settled at 4.4%, beyond the BSP’s 2-4% target this year and above the forecast of 4% for the entire year.

Core inflation, which discounted volatile prices of food and energy items, stood at 3%. This was slower than the 3.3% recorded in the previous month, but was steady from the rate recorded in the same month last year.

Core inflation averaged 3.3% so far this year.

“The slower pace in the inflation in June 2021 was primarily due to the lower annual rate of increase in the transport index at 9.6%, from 16.5% in May 2021,” the PSA said in a statement.

The PSA also attributed the easing in June to the slower increase in prices of alcoholic beverages and tobacco at 11.2% from 11.8% in May, clothing and footwear at 1.6% from 1.7%, health at 2.9% from 3.2%, and communication at 0.2% from 0.3%.

Inflation on food items stood at 4.9%, unchanged from May, but still higher compared with the 2.7% posted in June last year.

Meanwhile, the inflation rate for the bottom 30% of income households stood at 4.3% in June, slower than the 4.5% recorded in the previous month, but still faster than the 3% in June 2020.

The inflation rate for the bottom 30% takes into account the spending patterns of this income segment. Thus, its consumer price index differs from that of the average household with the former assigning heavier weights on necessities. — B.T.M. Gadon