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Inflation holds at 5-year high 4.6 percent in May

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ABS-CBN News

<p>MANILA - Inflation remained at its highest level in over 5 years in May, with the Bangko Sentral ng Pilipinas flagging it as a &quot;concern&quot; even as there are signs that the price increases are slowing down.</p><p>Consumer prices rose 4.6 percent in May from 4.5 percent in the previous month, according to the Philippine Statistics Authority. This was below the 4.9-percent forecast of economists in a Reuters poll and the Department of Finance.</p><p>Price increases quickened year-on-year for alcoholic beverages and tobacco, transportation and household equipment, while it slowed for food, non-alcoholic beverages, the PSA said.</p><p>&quot;The inflation outlook continues to be a concern and requires close attention,&quot; Bangko Sentral Governor Nestor Espenilla said.</p><p>Monetary authorities will &quot;consider what further adjustments are necessary,&quot; said Espenilla, who in May raised the benchmark lending rate by 25 basis points for the first time since September 2014.</p><p>Average inflation of 4.1 percent in the first 5 months is still above the BSP&#x27;s 2 to 4 percent target for the year, &quot;but maybe not going to be as bad as some might think,&quot; Espenilla said.</p><ul class="op-related-articles">	<li><a href="http://news.abs-cbn.com/business/06/01/18/inflation-a-fault-line-for-build-build-build-ambition">Inflation a fault line for &#x27;Build, Build, Build&#x27; ambition</a></li>	<li><a href="http://news.abs-cbn.com/business/01/18/18/inflation-top-risk-to-economy-this-year-2-rate-hikes-likely-analyst">Inflation top risk to economy this year, 2 rate hikes likely: analyst</a></li></ul><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2018/business/06/05/commodity.jpg"/><figcaption>This chart shows the drivers of inflation in May per commodity. <em>ABS-CBN Data Analytics</em></figcaption></figure></div><div><strong>PRICE HIKES TAPERING OFF</strong></div><p>Espenilla said there were signs that inflation was &quot;slowing and may be close to peak.&quot; Oil prices &quot;seem to have peaked&quot; while food price inflation appeared to be &quot;slowing down,&quot; he said.</p><p>The National Economic Development Authority is &quot;seeing signs of tapering off of inflation,&quot; said NEDA Undersecretary Rosemarie Edillon.</p><p>The government is addressing the &quot;challenging period&quot; of rising consumer prices, Budget Secretary Benjamin Diokno said.</p><p>&quot;The government is closely monitoring and taking steps to address the difficulties experienced by Filipino families today arising from higher prices,&quot; he said.</p><p>Higher duties on fuel and sugar sweetened drinks that took effect last Jan. 1 contribute only 0.4 percentage point to the increase in consumer prices, he said.</p><p>Rice imports will arrive in June and are expected to bring down food prices. The government is also preparing fuel subsidies, Diokno said.</p><ul class="op-related-articles">	<li><a href="http://news.abs-cbn.com/business/01/04/18/cost-of-train-will-softdrink-fuel-taxes-offset-higher-take-home-pay">Cost of TRAIN: Will softdrink, fuel taxes offset higher take-home pay?</a></li>	<li><a href="http://news.abs-cbn.com/business/03/22/18/interest-rates-are-rising-what-does-this-mean-for-your-loans">Interest rates are rising: What does this mean for your loans?</a></li></ul><div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2018/business/06/05/heat-map.jpg"/><figcaption>This heat map shows the pace of inflation per region. Areas in dark red color experienced a faster increase in consumer prices. <em>ABS-CBN Data Analytics</em></figcaption></figure></div><div><strong>GOOD &#x27;SURPRISE&#x27;</strong></div><p>Analysts welcomed the slower than expected inflation figures. The Philippine Stock Exchange Index was down 0.24 percent to 7,561.77 after the official data were announced.</p><p>&quot;It&#x27;s quite a good surprise, especially given the guidance of the BSP,&quot; First Metro Securities consultant Aaron Say told ANC&#x27;s Market Edge.</p><p>The &quot;surprise&quot; was due to month-on-month slowdown in price increases on food, non-alcoholic beverages and utilities, ING Bank said in a statement.</p><p>The BSP is expected to stay vigilant since second-round effects are &quot;uncertain,&quot; the bank said.</p><p>&quot;We believe that recent developments would mean that inflation is at or near the peak. These developments also cut the pressure on BSP to hike policy rates this month,&quot; it said.</p><p>The economy is strong enough to absorb rising consumer prices and another interest rate increase, said Sagarika Chandra, associate director for sovereigns at Fitch Ratings.</p><figure class="op-interactive"><div id="IVS_ABS_Body_Video_1_Container"> <ivs-player id="IVS_ABS_Body_Video_1" data-ivs-spid="3001339" data-ivs-key="e8c22c015ca9eafa76f1e3edfa03c603" data-ivs-vid="1432417" data-ivs-floating="1"></ivs-player> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/iframe-parent.js"></script> <script src="https://player.ivideosmart.com/ivsplayer/v4/dist/js/loader.js"></script> </div></figure><div class="iwantbar">Watch more in <a href="~//www.iwantv.com.ph/">iWantv</a> or <a href="~//tfc.tv/">TFC.tv</a></div>

<p>Inflation remained at its highest level in over 5 years in May, with the Bangko Sentral ng Pilipinas flagging it as a "concern" even as there are signs that the price increases are slowing down.</p>

Inflation remained at its highest level in over 5 years in May, with the Bangko Sentral ng Pilipinas flagging it as a "concern" even as there are signs that the price increases are slowing down.