Economy Philippine Inflation Eases to 1.3% in May, Driven by Lower Utility Costs

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The Philippines' inflation rate dipped to 1.3 percent in May, down from 1.4 percent in April, marking its lowest level since November 2019. This slowdown was primarily attributed to reduced utility costs and decelerating price increases in the restaurant and accommodation sectors.

 

This figure aligns with the median estimate of 13 economists polled by the Inquirer last week and falls within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 0.9 percent to 1.7 percent. According to the Philippine Statistics Authority's (PSA) report released on Thursday, the easing inflation highlights the nation’s current economic trends.

 

The housing, water, electricity, gas, and other fuels index saw a decrease, falling to 2.3 percent from 2.9 percent the month before. Meanwhile, the restaurant and accommodation services index also cooled to 2 percent from 2.3 percent in April.

 

Overall, the inflation rate remains below the official target range of 2 to 4 percent, providing a favourable environment for the BSP's ongoing monetary easing cycle. To date, the central bank has reduced the benchmark interest rate to 5.5 percent. This rate guides the banks in loan pricing, and the continued low inflation supports the BSP's strategy to stimulate economic growth through lower borrowing costs.

 

In summary, May's inflation data suggest a stabilisation in consumer prices, offering a cushion for the central bank to maintain its easing trajectory while fostering an economic rebound.

 

  Adapted by ASEAN Now from Inquirer 2025-06-05