Philippine Inflation Rises Slightly in June, Still Below Central Bank Target

Philippine annual inflation edged up to 1.4% in June from 1.3% in May, driven by higher utility costs, yet remained below the Bangko Sentral ng Pilipinas’ (BSP) target range of 2% to 4% for 2025. The figure also came in lower than the 1.5% median forecast in a Reuters poll, bringing the year-to-date average inflation to 1.8%.

The slight acceleration was largely due to increased prices in housing, water, electricity, gas, and other fuels, which rose 3.2% compared to 2.3% in May, according to the Philippine Statistics Authority. This was partly balanced by a record 14.3% drop in rice prices, easing overall food inflation.

Core inflation, which excludes volatile food and energy components, remained steady at 2.2% in June, reflecting underlying price stability.

The BSP expects inflation to stay below the lower end of its target through 2025, citing continued declines in rice prices as a key factor. This outlook supports the possibility of further monetary easing.

BSP Governor Eli Remolona signaled that the central bank could cut interest rates two more times this year to stimulate economic growth amid rising global uncertainties. The BSP lowered its benchmark rate for the second consecutive time in June, bringing it to 5.25%—its lowest level in over two years.

The central bank’s next policy meeting is scheduled for August 28, with market participants closely watching for any signals on future rate adjustments.

With inflation subdued and room for policy maneuvering, the Philippines is positioned to support its economy while keeping price pressures in check.