Inflation hits 4.6% in May, fastest in more than 5 yrs

Inflation accelerated by 4.6 percent in May, the fastest in more than five years and faster than the 4.5 percent reported in April, the government reported on Tuesday.

Prices of goods and services in the country increase by 2.9 percent in May 2017.

Year-to-date, inflation clocked in at 4.1 percent on average, breaching the government’s target range of 2 to 4 percent.

“There is no need for us to adjust the inflation target. The month-on-month inflation is at 4.1 percent, and our target is at 2-4 percent,” Budget Secretary Benjamin Diokno said during a press briefing in Manila.

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May 2018 Inflation Figures pic.twitter.com/gWL6WsaOsv

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“Inflation is mainly driven by fish and seafood, fuel and lubricants, and bread and cereals,” National Economic and Development Authority Undersecretary Rosemarie Edillion said during the same briefing.

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Top 10 Contributors to May 2018 Inflation pic.twitter.com/P09yzdkkFa

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In its report, the Philippine Statistics Authority (PSA) noted the uptrend in prices can be attributed to higher annual increases in the indices of the following commodity groups:

• Alcoholic Beverages and Tobacco (20.5%)

• Furnishing, Household Equipment and Routine Maintenance of the House (2.9%)

• Transport (6.2%)

• Restaurant and Miscellaneous Goods and Services (3.7%)

The inflation rate in May was slower than the median estimates at 4.9 percent.

“This may mean that the inflation momentum may be slowing down,” Union Bank of the Philippines chief economist Ruben Carlo Asuncion said.

Month-on-month inflation is showing signs of deceleration. University of Asia and the Pacific economics professor Vic Abola noted.

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NEDA Inflation by GMA News Online on Scribd

Edillon said the government expects the month-on-month deceleration will continue in the months ahead.

Diokno brushed off claims that the Tax Reform for Acceleration and Inclusion (TRAIN) was to blame for the spikes in commodity prices.

“Compared to these, the effect of excise taxes on petroleum, sweetened beverages, and tobacco under the Tax Reform for Acceleration and Inclusion law or TRAIN, remains at 0.4 percentage points, the same as in April 2018,” the Budget chief said. —KG/VDS, GMA News