MANILA (Reuters) – Philippine inflation eased for a fourth straight month in May, the statistics agency said on Friday, as the country’s coronavirus lockdown measures tempered price pressures on food and fuel, offsetting higher costs for alcoholic drinks.
Headline inflation <PHCPI=ECI> slowed to 2.1%, from April’s 2.2%, the lowest in six months and near the low end of the central bank’s 1.9% to 2.7% forecast for the month. It matched the median estimate in a Reuters’ poll.
Inflation averaged 2.5% in the first five months of the year, well inside the central bank’s 2%-4% target.
Core inflation, which excludes volatile food and fuel prices, was 2.9%, unchanged from the upwardly revised April figure <PHCPXY=ECI>.
While the Philippines is now gradually easing its lockdown, one of the strictest and longest in the world, any pickup in inflation could be tempered as some restrictions remain in place, economists said.
Tame inflation could prompt further monetary easing via another policy rate cut or a reduction in banks’ reserve requirement ratio to support an economy facing its deepest contraction in more than three decades, they said.
The central bank, which has cut interest rates three times this year, has sought “urgent and carefully coordinated measures” with other agencies to ease the adverse economic impact of the pandemic.
Central bank Governor Benjamin Diokno reiterated it stood ready to “use all available measures in its policy toolkit” to support economic growth.
(Reporting by Neil Jerome Morales; Writing by Enrico Dela Cruz; Editing by Ed Davies)