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Keisha Ta-Asan - The Philippine Star
June 1, 2025 | 12:00am
The Bangko Sentral ng Pilipinas expects the May inflation to settle below its two to four percent target range.
STAR / File
MANILA, Philippines — Headline inflation likely eased further in May, with the Bangko Sentral ng Pilipinas (BSP) projecting the headline rate settling within the range of 0.9 to 1.7 percent on the back of improving supply conditions and lower energy costs.
In a statement, the central bank said easing prices of rice and fish due to favorable domestic supply, coupled with lower oil prices, electricity rates and the recent appreciation of the peso, contributed to downward price pressures during the month.
“These could be offset in part by higher prices of selected food items such as vegetables and meat,” the BSP said.
The May print will mark either a slowdown or a pick up from the 1.4 percent inflation recorded in April. It will also mark the third straight month that inflation is below the two to four percent target range of the BSP.
The Philippine Statistics Authority is set to release the official inflation data on June 5.
The BSP said it remains committed to maintaining price stability that supports economic growth.
“The Monetary Board will continue to take a measured approach in adjusting the monetary policy stance in line with its price stability objectives conducive to balanced and sustainable growth of the economy and employment,” the central bank said.
BPI lead economist Jun Neri said he expects inflation to slightly ease to 1.3 percent in May from 1.4 percent in April due to the drop in rice prices, coupled with lower energy and fuel costs.
However, these factors were mitigated by a rebound in vegetable and fruit prices as well as the lifting of the maximum suggested retail price for pork, which contributed to the increase in meat prices.
“The likelihood of another rate cut by the BSP at its June policy meeting appears increasingly plausible,” Neri said.
“Headline inflation is projected to remain subdued in the coming months, largely supported by sustained softness in key commodity prices and high base from last year,” he said.
But base effects, particularly for rice, are expected to diminish starting September this year. This could gradually push the headline print close to the three percent level by year-end, Neri said.
In a separate statement, the BSP said the Philippines is well-positioned to support economic growth, a key advantage amid ongoing global trade shocks.
Speaking on behalf of the BSP governor at a recent event, BSP Deputy Governor Zeno Ronald Abenoja said the country’s current inflation rate of 1.4 percent as of April allows the central bank to lower interest rates.
“Low inflation gives us extra degrees of freedom to ease monetary policy and support growth,” BSP Governor Eli Remolona said in the speech delivered by Abenoja.
“Trade shocks are more damaging than supply shocks. Left unchecked, they can erode decades of hard-won progress.”
The Monetary Board has delivered a total of 100 basis points worth of rate cuts since it began its easing cycle in August last year. The BSP’s next policy meeting will be on June 19.
