Inflation picks up to 2.5% in June

Inflation slightly picked up to 2.5% in June after four consecutive months of deceleration, the Philippine Statistics Authority (PSA) reported Tuesday.

The latest reading compares with the 2.1% in May 2020 and the 2.7% in June 2019.

According to the National Statistician Claire Dennis Mapa, the latest uptick is caused by higher transport costs in June, following the easing of restrictions under the general community quarantine (GCQ).

Public transport was suspended since March and was only reallowed on June 1 albeit on a limited basis and under a two-phased approach.

Mapa said tricycle fares in June increased by 26% across the country to an estimated P17 per passenger from P12 previously.

In Metro Manila alone, tricylce fares rose by 43.7% month-on-month, and 129.3% on a year-on-year basis.

"Because of the social distancing guidelines, they may accommodate only a single passenger. That is why they are adjusting the price," he said in a virtual briefing.

"We've seen that under the transport index, this is primarily the mode of transportation of low-income households and it contributes a significant increase in the overall transport index," added Mapa.

Aside from tricycle fares, higher prices were also seen in both bicycles and tricycles, which grew by 7.5% in June versus the 5.3% in May.

Food

Among the 11 major commodity groups, the top contributor to the June inflation was food and non-alcoholic beverages with an annual rate of 2.7%, contributing 45.5% to the overall inflation.

"Right now, the food index which is the index which is the index with the biggest share in the overall inflation, is still downward," said Mapa.

"We're still seeing for example, downward trend in several of the food items but of course there are items that are starting to increase," he added.

Health

In the same briefing, Mapa said health inflation remained stable at 2.8%, the same recorded in May, amid the backdrop of the coronavirus pandemic.

"We covered a number of items in the health index and we are tracking this on a monthly basis and we've seen that the health movement is relatively stable," he said.

Mapa noted, however, that the data did not include changes in prices of personal protective equipment (PPE), a key item used by healthcare workers, which has seen an increase in demand.

"Remember the inflation rate is 2012 base year, so consumption is actually based on 2012 consumption, so those are the items in the next adjustment. This will be considered when we rebase," he said.

Education inflation also dropped to 1.6% in June from 4.7% in May, which Mapa attributed to the delay in the start of the school year still due to the coronavirus.

"This is slow compared to May and I think this is also due to the delay in the opening, so purchases in school items might have been delayed," he said.

Education

The Department of Education (DepEd) earlier said there will be no face-to-face classes until a vaccine against the coronavirus disease will be available.

The same data released by the PSA showed that upticks were also seen in alcoholic beverages and tobacco (18.5%); housing, water, electricity, gas, and other fuels (0.4%), and communication (0.4%).

Meanwhile, slower annual upticks were recorded in recreation and culture (1.2%) and restaurant and miscellaneous goods and services (2.3%). —KBK, GMA News