Philippine inflation cools further in relief for central bank

PHILIPPINE inflation eased for a second month, retreating further from a three-year high reached in April and providing relief for a central bank that’s been tightening monetary policy to tame consumer prices.

Inflation stood at 6.4 per cent in June compared with 6.8 per cent in May, the Philippine Statistics Authority said on Tuesday (Jul 7). That’s slower than the 7.2 per cent hit in April and below the median estimate of 6.5 per cent in a Bloomberg survey of economists.

The inflation for June was driven by the slower rate of increases in transport and food prices, National Statistician Dennis Mapa said in a briefing. The peso gained 0.1 per cent against the dollar after the release of the data.

The Bangko Sentral ng Pilipinas has raised its benchmark interest rate by 50 basis points this year in a bid to slow inflation that’s risen to well above its 3 per cent goal, one of the hottest in South-east Asia. The US-Iran war has driven up domestic fuel prices for the country, which sources nearly all of its oil from the Middle East.

Governor Eli Remolona said last month that another rate hike is possible at the BSP’s next policy meeting in August, but signalled that monetary authorities aren’t leaning toward a steep rate increase going forward with inflation expectations intact.

On Monday, Remolona said the economy can handle another quarter-point hike, while predicting the pace of growth may be more than 3 per cent in the second half of 2026. BLOOMBERG