The Philippine Statistics Authority (PSA) announced on Wednesday that the overall inflation in the country continued its deceleration trend, reaching 5.4% in June 2023 compared to 6.1% in May.
This marks the fifth consecutive month of slower inflation and represents the lowest rate in the past 13 months.
During the first half of 2023, the average inflation rate stood at 7.2%, slightly higher than the 6.1% recorded in June 2022.
The decrease in overall inflation was primarily influenced by the slower annual increase in the heavily-weighted category of food and non-alcoholic beverages, which rose by 6.7% compared to 7.4% in the previous month.
Additionally, the faster annual decrease in transport, with a rate of -3.1% in June compared to -0.5% in May, contributed to the overall decline in inflation.
Another factor was the deceleration in the housing, water, electricity, gas, and other fuels category, which experienced an annual growth rate of 5.6% in June, down from 6.5% in May.
The top three commodity groups that contributed to the overall inflation were:
- food and non-alcoholic beverages with a 47.3% share or 2.6 percentage points
- housing, water, electricity, gas, and other fuels with a 22.4% share or 1.2 percentage points
- restaurants and accommodation services with a 14.7% share or 0.8 percentage point
Inflation in NCR
Inflation in the National Capital Region (NCR) also slowed down in June 2023, registering 5.6% compared to 6.5% in the previous month.
The decrease in NCR's inflation was mainly driven by the slower annual increase in the food and non-alcoholic beverages category, which grew by 6.0% in June 2023 compared to 7.6% in May 2023.
Inflation outside NCR
Following the national and NCR trends, inflation in areas outside the NCR (AONCR) also decelerated further to 5.3% in June 2023, down from 6.0% in the previous month.
In June 2022, inflation in the AONCR was higher at 6.3%.
The slowdown in inflation in the AONCR for two consecutive months was primarily caused by the annual decrease in the transport category, which recorded a rate of -3.3% in June 2023 compared to -0.8% in May 2023.
The Banko Sentral of the Philippines (BSP) earlier projected that the inflation rate in June will be settled between the range of 5.3% to 6.1% due to the higher costs of foods, particularly rice, vegetables, and fish.
