Philippine inflation eases to 6.4% in June

By Francis Allan L. Angelo

Inflation in the Philippines eased in June as fuel costs moderated and food supply interventions helped temper price increases, but the central bank warned that inflationary pressures remain strong and could stay above target through 2027.

The Philippine Statistics Authority said Tuesday, July 7, that headline inflation slowed to 6.4% in June 2026 from 6.8% in May, bringing the year-to-date average to 4.8%. The June rate was still far higher than the 1.4% recorded in the same month last year.

The Department of Economy, Planning, and Development said the slowdown was largely driven by lower transport inflation, which decelerated to 12.8% in June from 16.2% in May amid easing tensions in the Middle East.

Prices of food and non-alcoholic beverages also rose at a slower pace of 5.2%, down from 5.7% in May.

“Every percentage point drop in inflation matters to Filipino families,” DEPDev Secretary Arsenio M. Balisacan said. “It means household budgets can go further, especially for poor families who spend a large share of their income on food and transportation.”

Balisacan said easing inflation reflected both improving global conditions and coordinated government measures, including targeted assistance for farmers, fisherfolk, and transport service providers.

DEPDev also cited the lifting of toll fees for vehicles transporting agricultural produce as among the measures meant to reduce supply costs and ease pressure on consumer prices.

“If we want stable prices, we need a stable food supply,” the government’s chief economist said. “Reducing losses from weather disturbances and other supply disruptions remains one of the most effective ways to protect both consumers and producers from future price shocks.”

The government is implementing the El Niño Food Security Action Plan, with PHP 26.13 billion allocated to strengthen preparedness for weather disturbances, ensure adequate food supply, minimize income losses among affected farmers and fisherfolk, and expand consumer access to affordable food.

The Philippine and Japanese governments are also advancing plans to establish a national strategic petroleum reserve, which DEPDev said would provide a buffer against geopolitical disruptions and extreme price volatility.

“Our goal is not only to bring inflation down but to keep it low and stable. That requires stronger food production, more efficient supply chains, and greater resilience to climate and other shocks,” Balisacan said. “By strengthening these foundations, we can help Filipino families plan, save, and prosper with greater confidence.”

Despite the slower headline rate, PSA data showed core inflation, which excludes selected food and energy items, rose to 4.4% in June from 4.1% in May and 2.2% in June 2025.

Food inflation also slowed to 5.4% in June from 5.8% in May, but remained sharply higher than the 0.1% recorded in June 2025, according to the PSA.

The PSA said food and non-alcoholic beverages contributed 31.4% to overall inflation, equivalent to 2.0 percentage points, followed by housing, water, electricity, gas and other fuels at 26.0%, or 1.7 percentage points, and transport at 18.4%, or 1.2 percentage points.

In areas outside the National Capital Region, inflation eased to 6.7% in June from 7.1% in May, while NCR inflation slowed to 4.9% from 5.0%.

The Bangko Sentral ng Pilipinas said the June inflation outturn was within its forecast range of 6.0% to 7.0%.

The BSP said global oil and fertilizer prices remained elevated in June and continued to drive domestic fuel and food prices.

The central bank also said rising core inflation signaled broadening price pressures and second-round effects, including higher inflation expectations.

The latest BSP projections showed average headline inflation remaining above the 3% ±1.0 percentage point target in 2026 and 2027, before moving close to the 3.0% target in 2028.

The BSP’s inflation target for 2025 to 2028 is set at 3.0%, with a tolerance band of ±1.0 percentage point.

The Monetary Board said it would continue to be guided by incoming data and is prepared to take further monetary action as needed to bring inflation back to the 3.0% target.