Philippine Inflation Eases to 6.4% in June as Fuel and Food Prices Cool

Inflation in the Philippines slowed to 6.4 percent in June, down from 6.8 percent in May, the Philippine Statistics Authority said Tuesday. The decline marks the second straight month of easing, though the rate remains above the government’s 2–4 percent target range.

Transport costs were the main contributor to the slowdown, rising 12.8 percent year-on-year in June versus 16.2 percent in May. The moderation followed the mid-June reopening of the Strait of Hormuz after an interim U.S.-Iran agreement restored oil flows that had been interrupted for more than 100 days.

Food and non-alcoholic beverages also saw softer price growth, with inflation for the group easing to 5.2 percent from 5.7 percent the previous month. Rice inflation slowed to 15.0 percent, and fish and seafood eased to 7.8 percent. Vegetable prices bucked the trend, however, jumping to 9.0 percent from 6.2 percent in May.

Core inflation, which excludes volatile food and energy items and is closely watched by policymakers, accelerated to 4.4 percent in June from 4.1 percent in May, its highest level since December 2023. Higher prices for housing, utilities, health services, and restaurants helped sustain underlying inflationary pressure.

The January-to-June average inflation rate stood at 4.8 percent. The Bangko Sentral ng Pilipinas raised its benchmark rate to 4.75 percent in June and had forecast June inflation to land between 6 and 7 percent. The central bank now projects an average inflation rate of 6.4 percent for full-year 2026.

Policymakers and analysts warn the outlook remains uncertain. Late-June military exchanges between the United States and Iran briefly threatened shipping in the Strait of Hormuz and pushed oil prices up before both sides resumed negotiations. Analysts also cite a possible El Niño impact on agricultural output and pending wage hike petitions as upside risks to inflation in the second half of the year.

“With inflation still above target and core pressures building, markets expect the Bangko Sentral to keep rates steady or move to tighten further at upcoming policy meetings,” analysts said.

Department of Economy, Planning, and Development Secretary Arsenio Balisacan said the month-to-month easing brings relief to households, particularly poorer families that spend a larger share of income on food and transport, but he cautioned that “every percentage point drop in inflation matters.”