Inflation rate in June accelerated to a 43-month high of 6.1 percent from 5.4 percent in May, driven by higher prices of food, non-alcoholic beverages and transport fares, the Philippine Statistics Authority said Tuesday.
The June inflation increased from 3.7 percent a year ago and was the fastest since the 6.1 percent registered in November 2018. The figure brought the average inflation in the first half of 2022 to 4.4 percent, above the target range of 2 percent to 4 percent set by the government for the year.
“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,” the PSA said in a statement.
This was followed by transport whose index grew by 17.1 percent annually, from 14.6 percent in May 2022. Relative to the annual rates in the previous month, annual increases were faster in the indices of alcoholic beverages and tobacco at 7.8 percent; clothing and footwear, 2.2 percent; housing, water, electricity, gas and other fuels, 6.6 percent; furnishings, household equipment and routine household maintenance, 2.9 percent; health, 2.6 percent; recreation, sport and culture, 1.9 percent; and personal care, and miscellaneous goods and services, 2.6 percent.
The annual mark-up in the information and communication index decelerated to 0.5 percent. The indices of education services, restaurants and accommodation services and financial services retained their previous month’s inflation rates.
Food inflation rose to 6.4 percent in June from 5.2 percent in May, led by higher annual growth in the meat and other parts of slaughtered land animals index and the price uptrend in fruits and nuts.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said the sources of second-round inflation effects included higher wages, higher transport fares, series of fuel pump prices increases that led to higher transport costs, elevated global commodity prices and weaker peso exchange rate that increased import costs.
“Some regional wage boards already approved minimum wage rate hikes [at least +6 percent for Metro Manila] effective as early as June 2022 and minimum transport/jeepney fares raised by +P2 or +22.2 percent to P11, already led to some price increases in some products and services to reflect the pass-on effects during the month,” Ricafort said.
He said inflation “could still pick up further with some lagged effects in the coming months, as could be offset by competition and pricing power as the economy is still reeling from the adverse effects of the pandemic.”
Trade Secretary Alfredo Pascual said the higher inflation negatively affected the manufacturers and the supply chain because of the unstable prices of raw materials.
“The manufacturers may either take on the extra costs themselves, find new ways to cut costs or pass rising prices along to customers who are already reluctant to spend,” Pascual said in a presentation at the first Cabinet meeting with President Ferdinand Marcos Jr.
Pascua said the immediate goal of the Department of Trade and Industry is to efficiently manage soaring prices of fuel and gasoline.
Among the commodities with the highest upward price adjustment were canned sardines, milk, coffee, bread, instant noodles, salt, detergent soap, bottled water, candles, condiments, toilet soap and batteries.
The DTI said it would continue its collaboration with the Department of Agriculture to improve food value chains through upgraded transport and logistics facilities. With Othel V. Campos
