Inflation decelerates to 2.8% in June – PSA

Inflation decelerated 2.8 percent in June, the slowest so far this year on lower gains in food prices, data released by Philippine Statistics Authority (PSA) on Wednesday showed.

Headline inflation further eased last month, on the heels of slower yearly gains in food and non-food items, according to the PSA.

The latest figure compares with 3.1 percent in May and 1.9 percent in June 2016.

It was the slowest since inflation clocked in at 2.7 percent in January.

Bangko Sentral ng Pilipinas (BSP) Governor Nestor A. Espenilla Jr. was not surprised. "This is welcome news but not unexpected. The further deceleration in inflation in June to 2.8 percent is in line with our forecast," he said in a text message to reporters.

The BSP last week penciled in a 2.4 to 3.2 percent range of inflation in June, citing lower electricity rates and petroleum prices.

"The lower inflation is partly driven by lower fuel prices and power rates," Espenilla said.

The Manila Electric Co. lowered electricity rates by P1.43 per kilowatt hour, bringing down overall rates to P8.17 per kWh in June.

Meanwhile, motorists were greeted by four consecutive weekly rollbacks in prices of petroleum products last month.

"This validation gives us the space to carefully consider our policy options with respect to fine tuning deployment of our monetary instruments to further the market-based development of the domestic financial market," Espenilla said.

The BSP has a 3.1 percent inflation outlook for the year, in line with a 2.0 to 4.0 percent target range. — VDS, GMA News