The headline inflation in the Philippines decelerated to 2.7 percent in June 2019. This is the lowest inflation recorded since September 2017.
Inflation in May 2019 was higher at 3.2 percent and in June 2018, 5.2 percent.
Factors that Influenced in Slowing Down the Inflation Rate for June
The slowdown of inflation in June 2019 was mainly driven by slower annual rate posted in the index of the heavily-weighted food and non-alcoholic beverages at 2.7 percent. Also contributing to the downtrend of the headline inflation were the slower annual increments in the indices of the following commodity groups:
- Alcoholic beverages and tobacco, 9.3%;
- Housing, water, electricity, gas, and other fuels, 3.0%;
- Furnishing, household equipment and routine maintenance of the house, 3.1%;
- Transport, 1.6%; and
- Communication, 0.3%.
Moreover, education index which dropped by 4.5 percent during the month further triggered the downtrend in the inflation of June 2019.
On the other hand, higher annual rates were registered in the indices of health at 3.7 percent; and recreation and culture, 3.2 percent. The rest of the commodity groups retained their previous month’s annual rates.
Excluding selected food and energy items, core inflation, likewise, exhibited a slower pace of 3.3 percent in June 2019. In the previous month, core inflation was registered at 3.5 percent and in June 2018, 4.3 percent.
A lower annual hike of 2.6 percent was noted in the country’s food index in June 2019. Its annual rate in May 2019 was higher at 3.2 percent and in June 2018, 5.8 percent.
Annual changes in the indices of rice and corn dropped further by 1.7 percent and 4.0 percent, respectively. Other food groups had lower annual increase except for the indices of fruits and food products, not elsewhere classified whose annual gains were higher at 5.0 percent and 7.3 percent, respectively.
National Capital Region (NCR)
Inflation in NCR, likewise, moved at a slower pace of 3.0 percent in June 2019. Its annual rate was observed at 3.4 percent in May 2019 and 5.8 percent in June 2018. Slower annual increases were registered in all the commodity groups, except for the indices of alcoholic beverages and tobacco; communication; and restaurant and miscellaneous goods and services.
The annual mark-ups in the indices of alcoholic beverages and tobacco were higher at 3.1 percent, and restaurant and miscellaneous goods and services, 3.4 percent.
For three consecutive months now, the annual rate of communication index remained at 0.3 percent.
Areas Outside NCR (AONCR)
The same trend was observed in the inflation of AONCR as it eased to 2.6 percent in June 2019. Inflation in the previous month was 3.1 percent and in June 2018, 5.1 percent.
Compared with their annual rates in May 2019, annual gains were slower in the indices of the following commodity groups:
- Food and non-alcoholic beverages, 2.6%;
- Alcoholic beverages and tobacco, 10.5%;
- Housing, water, electricity, gas, and other fuels, 3.1%;
- Transport, 1.0%; and
- Restaurant and miscellaneous goods and services, 3.1%.
Moreover, an annual decline of 6.3 percent during the month was noted in education index. Meanwhile, the rest of the commodity groups posted either higher annual increments or retained its previous month’s annual rate.
Relative to their annual rates in the previous month, all the regions in AONCR had lower inflation in June 2019, except MIMAROPA Region. The lowest inflation among the regions was recorded in Region IX (Zamboanga Peninsula) at 0.7 percent, while the highest remained in MIMAROPA Region at 5.2 percent.