Driven by high electricity rates, headline inflation slightly increased to 1.4 percent in June from 1.3 percent in the previous month, the Philippine Statistics Authority (PSA) reported on Friday.

It noted that the rise was primarily brought about by the year-on-year increase in the index of housing, water, electricity, gas and other fuels at 3.2 percent from 2.3 percent in May. Electricity marked a significant increase of 4.6 percentage points as its inflation climbed to 7.4 percent in June from 2.3 percent in May.

In a press conference, PSA Undersecretary Claire Dennis Mapa said electricity was the number one among the top five contributors to the June inflation followed by pork which increased from 11.9 percent in May to 13.0 percent in June.

"There was an adjustment in the prices of electricity, year-on-year. I was informed that while there was a reduction in the price for the month of June vs. May the rate for the month of June 2024 is still higher," he said.

"There is a substantial gap from June 2024 that is why our electricity inflation is at 7.4 percent vs 2.8 percent in May. It has a weight of around almost 4.6 percent if you compute that the weight is small but the inflation rate is high that is why it has a big impact," he added.

Education services gained from 4.2 percent to 5.4 percent was one of the main sources of inflation as classes formally opened in June.

"This is due to tuition fees, the school supplies belong to a different sub group. We saw that during the opening of classes there were increases in the tuition fees so as mentioned earlier the inflation rate for the primary education increased to 7.5 percent, the secondary education was 6.7 percent and the tertiary education was at 3.9 percent, all driven by increases in tuition fees," he said.

Mapa also noted that the 14.3 percent drop in rice inflation for June marks the "biggest drop in terms of year on year inflation rate for rice" since 1995.

"I was informed that even in the sample outlets the 20 peso per kilo of rice are available, there are other outlets so that is why the average price, particularly the regular milled rice continue to go down, so it already has an impact," he said. Robina Asido/DMS