Inflation steadies at 4.5% in May

The overall year-on-year increase in prices of widely used goods steadied for the third consecutive month in May, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary PSA data showed headline inflation at 4.5%, steady from April and surging from 2.1% a year ago.

The annual rate recorded in May marked its third straight month of inflation remaining unchanged.

The latest headline figure matched the median estimate in a BusinessWorld poll conducted late last week. This also fell within the 4%-4.8% estimate given by the Bangko Sentral ng Pilipinas (BSP) for May.

Year to date, inflation settled at 4.4%, still slightly above the BSP’s 2-4% target, as well as its revised inflation forecast of 3.9% for the year. May was the fifth month in a row that inflation went beyond target.

Food inflation eased to 4.9% in May from 5% in April. Still, this was faster than last year’s 2.9%.

Core inflation, which is used in determining underlying price trends by removing the volatile food and fuel prices, stood at 3.3% in May. This was also unchanged from the annual rate recorded in April, but was still higher than the 2.9% core inflation in May 2020.

So far, core inflation averaged 3.4% this year compared with the 3.1% in 2019’s comparable five months.

Meanwhile, the inflation rate experienced by the bottom 30% of income households likewise stood at 4.5% in May, slower than the 4.9% rate recorded the previous month. Still, this was faster than the 2.9% logged in May 2020. — Abigail Marie P. Yraola