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Keisha Ta-Asan - The Philippine Star
June 2, 2025 | 12:00am
MANILA, Philippines — Economists expressed mixed views on inflation data for May, with some saying it likely eased further while others expected the price index to reverse course.
A poll of leading analysts showed that some expect inflation to come in between 1.2 and 1.5 percent year-on-year in May, a softer print than April’s 1.4 percent, citing the continued decline in energy costs and stable peso-dollar exchange rate, even as certain food items posted slight upticks.
Other economists, however, pegged May inflation at a slightly higher rate, although still well below the two to four percent target range of the Bangko Sentral ng Pilipinas (BSP).
HSBC economist for ASEAN Aris Dacanay projected inflation at 1.2 percent, pointing to the combined effect of a strong peso and moderating global oil prices.
“Though some volatility was seen in diesel prices, fuel prices in general are much lower today than on the last day of April,” he said. “Food prices, on the other hand, were mixed. Leafy vegetables like cabbages were more expensive, but rice prices continued their decline.”
Dacanay said he expects inflation to have stayed flat on a monthly basis, with downside risks if prices of other goods and services followed the trend in energy.
“If inflation were to surprise again to the downside, the risk of a back-to-back rate cut in June would likely increase,” he added.
UnionBank chief economist Carlo Asuncion also sees May inflation at 1.3 percent, which he believes will mark the low point for the year.
“From there, we see a gradual pickup – reaching around 1.9 percent by August during the typhoon season and breaching two percent later in the year,” he said.
UnionBank has cut its full-year inflation forecast to 1.8 percent from 2.2 percent, with a year-end projection of 2.6 percent.
Asuncion said the benign outlook is underpinned by stable oil prices, limited cost pressures from China and a steady peso. “These factors help offset the impact of higher US tariffs,” he said. “This strengthens the case for a BSP rate cut at the June 19 policy meeting.”
Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., also projected a 1.3 percent inflation in May.
On the other hand, Metrobank chief economist Nicky Mapa and Oikonomia Advisory & Research Inc. economist Reinielle Matt Erece both forecast a 1.5 percent inflation for May.
Mapa cited upward pressure from meat prices and utilities, while rice deflation and cheaper transport costs provided a counterweight. “Despite the slight uptick, inflation is well below target and we expect up to three more rate cuts this year,” he said.
Erece likewise pointed to price increases in livestock and some vegetables, but said oil, electricity, and lower import costs thanks to a stronger peso kept inflation low. “We expect another rate cut this June to sustain demand and support growth,” he said.
Meanwhile, Moody’s economist Sarah Tan expects inflation to remain at 1.4 percent in May, unchanged from April. She said inflation remains below the BSP’s two to four percent target band due to better weather, improved harvests and lower utility prices.
“Food supply is expected to have improved compared to a year earlier, supporting stable retail price growth. Meanwhile, lower power rates in May provided relief to households and businesses,” Tan said.
The Philippine Statistics Authority is set to release the official inflation data on June 5. The BSP, for its part, earlier projected May inflation to range between 0.9 to 1.7 percent on the back of improving supply conditions and lower energy costs.
The Monetary Board is scheduled to meet on June 19 to decide on policy rates, with many market watchers expecting a possible cut if inflation stays subdued.
