The Finance Department said Monday inflation rate in May likely slowed down to 3.2 percent from 3.4 percent in April, as prices of food, particularly vegetables, tapered off.
“This deceleration may be traced to the easing in food prices, primarily of vegetables, which are forecast to drop from 8.1 percent to 4.7 percent,” Finance Undersecretary Gil Beltran said in an economic bulletin submitted to Finance Secretary Carlos Dominguez III.
The agency said compared to a year ago, the May inflation likely accelerated from 1.6 percent. However, this represented a respite from the upward trend in the first three months that brought the rate to a 28-month high of 3.4 percent in March.
“Inflation for clothing and footwear, electricity, gas and other fuels, and transport will drop by 0.3 to 0.4 percentage point,” said Beltran, who is also the DoF’s chief economist.
“Inflation decline will give policymakers adequate room for maneuver to sustain rapid economic growth in the face of another possible adjustment in the Fed rate in June,” he said.
The Duterte administration’s economic team set an inflation target of 2 percent to 4 percent this year and next year.
The Bangko Sentral ng Pilipinas forecast an average inflation rate of 3.4 percent in 2017 and 3 percent in 2018. Meanwhile, the gross domestic product grew 6.4 percent in the first quarter.