Philippines' inflation hits 6.1% in June

·Contributor
·2 min read
The Bangko Sentral ng Pilipinas (BSP) headquarters complex in Manila, the Philippines, on Tuesday, Dec. 14, 2021. The Philippines' headline inflation reached a four-year high of 6.1% for the month of June, data from the Philippine Statistics Authority (PSA) shows.(Photo: Veejay Villafranca/Bloomberg via Getty Images)
The Bangko Sentral ng Pilipinas (BSP) headquarters complex in Manila, the Philippines, on Tuesday, Dec. 14, 2021. The Philippines' headline inflation reached a four-year high of 6.1% for the month of June, data from the Philippine Statistics Authority (PSA) shows.(Photo: Veejay Villafranca/Bloomberg via Getty Images)

The Philippines' headline inflation reached a four-year high of 6.1% for the month of June, data from the Philippine Statistics Authority (PSA) shows.

The headline figure was within the Bangko Sentral ng Pilipinas’ (BSP) forecast inflation rate, which was figured between 5.7% to 6.5%.

Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, Philippine Statistics Authority
Source: Retail Price Survey of Commodities for the Generation of Consumer Price Index, Philippine Statistics Authority

The record high inflation sets average inflation from January to June 2022 at 4.4%. According to PSA, inflation for June 2022 is the highest recorded since October 2018.

Meanwhile, inflation at Areas Outside National Capital Region ( AONCR) rose upwards to 6.3% in June 2022. PSA reported AONCR’s inflation at 5.5% and the country at 5.4% in the month of May.

According to PSA Undersecretary and National Statistician Claire Dennis Mapa, the uptrend in inflation was due to higher prices in different items and services. “The uptrend of inflation for June 2022 was primarily brought about by the higher annual growth rate in the index for food and non-alcoholic beverages at 6.0 percent, from 4.9 percent in the previous month. This was followed by transport whose index grew by 17.1 percent annually, from 14.6 percent in May 2022,” Mapa stated in PSA’s Summary Inflation Report.

Mapa also said that the purchasing power of the local Peso declined, highlighting that the 2018 P1 is now P0.87 in June 2022. The weakening local currency could factor in a rise in inflation while restricting the purchasing power of consumers.

The Bangko Sentral ng Pilipinas (BSP) may also weigh in on considerations for implement bigger interest rate hikes due to the high inflation rates and weak local currency, according to central bank Governor Felipe Medalla. The Philippine peso is trading close to a 17-year low against the US dollar as a result of the decreasing interest rate differential between the Philippines and the US.

Basti Evangelista is a news and opinion writer who focuses on Philippine national politics and sectoral issues. His personal advocacy includes press freedom and social justice.

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