1. Philippines

Headline inflation or the overall inflation in the Philippines slowed down further to 6.1 percent in May 2023 from 6.6 percent in April 2023. This is the fourth consecutive month of deceleration in the headline inflation in the country. Despite the decline, the inflation rate in May 2022 was still lower at 5.4 percent. The year-to-date average inflation rate, that is from January to May 2023, stood at 7.5 percent.

Among the 13 commodity groups, the downtrend of the headline inflation in May 2023 was primarily brought about by the annual decline in the index of transport at -0.5 percent from 2.6 percent annual increase in the previous month. The heavily-weighted food and non-alcoholic beverages also pulled down the overall inflation during the month with a lower inflation rate of 7.4 percent from 7.9 percent in April 2023. The third main source of deceleration for the May 2023 inflation was restaurants and accommodation services, which registered slower inflation at 8.3 percent from 8.6 percent in the previous month.

In addition, the annual rate of alcoholic beverages and tobacco index slowed down to 12.3 percent during the month.

Meanwhile, higher inflation rates were observed in the indices of furnishings, household equipment and routine household maintenance at 6.2 percent in May 2023 from 6.1 percent in April 2023; and recreation, sport and culture at 4.9 percent during the month from 4.7 percent in the previous month.

The indices of the following commodity groups retained their previous month’s annual growth rates:

1. Clothing and footwear, 5.1 percent;
2. Housing, water, electricity, gas and other fuels, 6.5 percent;
3. Health, 4.1 percent;
4. Information and Communication, 0.7 percent;
5. Education services, 3.6 percent;
6. Financial services, 0.0 percent; and
7. Personal care, and miscellaneous goods and services, 5.7 percent.

The top three commodity groups contributing to the 6.1 percent headline inflation in May 2023 were the following:

a. Food and non-alcoholic beverages with 46.0 percent share or 2.8 percentage points;

b. Housing, water, electricity, gas and other fuels with 22.9 percent share or 1.4 percentage points; and

c. Restaurants and accommodation services with 13.1 percent share or 0.8 percentage point.

2. Cordillera Administrative Region (CAR)

Inflation in the region further slowed down to 3.9 percent in May 2023, from 4.3 percent in April 2023. In May 2022, inflation was observed at 6.9 percent.

Lower inflation rate in transport at 0.6 percent from 4.1 percent in April 2023 was the main driver in the downtrend of inflation. This was followed by food and non-alcoholic beverages at 7.1 percent, from 7.2 percent and housing, water, electricity, gas and other fuels at 0.3 percent, from 0.4 percent in the previous month.

Also contributed to the downtrend are the following:

1. Alcoholic beverages and tobacco, 9.1 percent;
2. Clothing and footwear, 4.3 percent;
3. Health, 3.9 percent;
4. Information and communication, 0.1 percent, and
5. Personal care, and miscellaneous goods and services, 4.8 percent.

In contrast, furnishing, household equipment and routine household maintenance, and recreation, sport and culture increased for the month of May at 4.6 percent and 5.2 percent, respectively.

The rest of the commodity groups had the same inflation rate from the previous month.

3. Baguio City

Following the trend of the inflation at the national and regional level, inflation in Baguio City further slowed down to 3.0 percent in May 2023, from 3.4 percent in April 2023. In May 2022, inflation was higher at 5.9 percent. (Table B and Figure 2)

The main driver in the downtrend of inflation in April 2023 was transport at 2.8 percent, from 6.4 percent in April 2023.  This was followed by food and non-alcoholic beverages at 8.9 percent, from 9.4 percent, and personal care, and miscellaneous goods and services at 4.9 percent, from the 5.5 percent in the previous month.

Relative to their annual rates in the previous month, decreases were also observed in the indices of the following commodity groups:

1. Alcoholic beverages and tobacco, 8.9 percent; and
2. Health, 3.1 percent.

On the contrary, increases were observed in the index of the following:

1. Clothing and footwear, 0.7 percent;
2. Furnishing, household equipment and routine household maintenance, 2.1 percent; and
3. Restaurants and accommodation services, 4.1 percent.

Meanwhile, the rest of the commodity groups remained at their previous month’s annual rates. (Table 3)

Food inflation at the city level further decreased to 9.2 percent in May 2023, from 9.6 percent in April 2023. In May 2022, food inflation stood at 12.1 percent. (Table 5,9)

The lower food inflation was mainly brought about by vegetables, tubers, plantains, cooking bananas and pulses at 13.9 percent in May 2023, from 17.4 percent in April 2023. It was followed by milk, other dairy products at 18.9 percent, from 20.8 percent, and fish and other seafood at 4.0 percent, from 4.6 percent in the previous month.

Moreover, lower annual mark-ups were observed in the indices of the following food groups during the month:

1. Rice, 5.9 percent;
2. Flour, bread and other bakery products, pasta products, and other cereals, 12.2 percent;
3. Oils and fats, 7.9 percent;
4. Sugar, confectionery and desserts, 24.9 percent; and
5. Ready-made food and other food products n.e.c, 7.0 percent.

Meanwhile, increases were recorded for the following:

1. Corn, 60.6 percent;
2. Meat and other parts of slaughtered land animals, 3.7 percent; and
3. Fruits and nuts, 15.6 percent; and

Note: CPIs and inflation rates by region, province and selected city are posted at the PSA website (https://openstat.psa.gov.ph/).

IMELDA L. BUYUCCAN

Chief Statistical Specialist

/SMBP