MANILA -- Headline inflation slowed down to 4.1 percent year-on-year in June from 4.5 percent in the previous month and was within the BSP’s monthly forecast range of 3.9-4.7 percent for the month. The resulting year-to-date average inflation rate of 4.4 percent was above the Government’s annual inflation target of 3.0 percent ±  1.0 percentage point for the year. Similarly, core inflation, which excludes selected volatile food and energy items to depict underlying demand-side price pressures, also eased to 3.0 percent year-on-year in June from 3.3 percent in the previous month. On a month-on-month seasonally adjusted basis, inflation remained at 0.2 percent in June, unchanged from the previous month’s rate. 

Inflation decelerated in June due to the slower price increases for non-food items. Non-food inflation was mainly pulled down by the slowdown in transport inflation due in part to base effects stemming from the substantial price increase in the previous year brought about by the higher tricycle fare. Meanwhile, food inflation was steady in June as meat inflation eased given additional supply from pork imports while rice inflation declined further, offsetting the higher year-on-year inflation for fish.

The latest inflation outturn is consistent with the BSP’s expectations that inflation will settle at the high end of the target range in 2021. Price pressures are seen to abate as supply-side factors ease with average inflation reverting near the midpoint of the target in 2022 to 2023. Meanwhile, the risks to the inflation outlook also remain broadly balanced over the policy horizon. Moving forward, the BSP will continue to monitor emerging price developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved. (BSP)