Philippines inflation slows to 6.8% in May

Key facts

• Philippines CPI inflation slowed to 6.8% year-over-year in May.
• May inflation was below analyst forecasts of 7.5%-7.9%.
• Deceleration was driven by lower price growth in transport, food, and housing.
• Annual core inflation accelerated to 4.1% in May.
• The Bangko Sentral ng Pilipinas (BSP) still plans a rate hike.

Philippines Consumer Price Index (CPI) inflation decelerated to 6.8% year-over-year in May, a decrease from 7.2% in April and below the forecasts of analysts, which ranged from 7.5% to 7.9%. The slowdown was primarily driven by lower price growth in the transport sector (16.2% vs 21.4% in April), food and non-alcoholic beverages (5.7% vs 6.0%), and housing, water, electricity, gas, and other fuels (7.8% vs 8.2%). Seasonally adjusted CPI fell by 0.6% month-over-month in May. Meanwhile, annual core inflation saw a slight acceleration to 4.1% in May from 3.9% in April. Despite the softer headline inflation, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno stated that a rate hike is still on track, aiming to manage inflation expectations and maintain price stability. The May inflation figure falls within the BSP's month-ahead forecast range of 7.1-7.9%.