MANILA, June 5 : The Philippine central bank said on Friday it will "take necessary actions" to bring inflation back to its target, after the annual pace of consumer price growth remained above its 3 per cent goal for a third straight month in May.Annual inflation unexpectedly slowed to 6.8 per cent in May from 7.2 per cent in April, largely due to slower increases in food and transport costs, the statistics agency said on Friday. Economists in a Reuters poll had expected May inflation to quicken to 7.5 per cent from the previous month's 7.2 per cent, while the central bank had set a forecast range of 7.1 per cent to 7.9 per cent."While the easing of inflation in May is encouraging, we recognize that price pressures remain elevated," Economic Planning Secretary Arsenio Balisacan said in a statement.
The slowdown in inflation comes ahead of the central bank's scheduled June 18 meeting, when it is expected to hike interest rates for the second time in a row after raising the benchmark rate by 25 basis points to 4.5 per cent in April to keep a lid on prices. "The BSP will take necessary actions to ensure inflation returns to its 3 per cent target, in keeping with its primary mandate to ensure price stability," the central bank said in a statement.The latest monthly inflation rate brought the average in the first five months of the year to 4.5 per cent.Core inflation, which excludes volatile food and energy prices, quickened to 4.1 per cent in May from 3.9 per cent in April.Government data showed that the transport price index fell to 16.2 per cent in May from the previous month's 21.4 per cent, with diesel and gasoline prices rising at a slower annual pace. Food inflation also fell, with prices increasing 5.8 per cent from a year earlier in May, compared to 6.1 per cent in April.
