Philippine annual inflation slows to 6.8% in May

Philippine annual inflation eased to 6.8% in May, a notable slowdown from the previous month's 7.2%, the Philippine Statistics Authority reported Friday. This moderation was largely attributed to slower price increases in the food and transportation sectors.

The May inflation rate fell below both the 7.5% median forecast from a Reuters poll and the central bank's own projection, which had anticipated a range of 7.1% to 7.9%. This suggests that price pressures may be starting to ease more than expected.

However, the average inflation rate for the first five months of the year stands at 4.5%, which is still above the Bangko Sentral ng Pilipinas' (BSP) target range of 2.0% to 4.0%. Core inflation, which excludes volatile food and energy prices, saw a slight increase to 4.1% in May from 3.9% in April, indicating persistent underlying price pressures.

In response to inflationary concerns, the BSP implemented a 25 basis point interest rate hike in April. The central bank is scheduled to convene on June 18 to review its monetary policy, with market participants closely watching for further signals on its stance towards inflation management.