Following four consecutive months of increases, the rate of inflation in the Philippines eased in June to 3.7%.

This is less than the 3.9% registered in May and 5.4% in June last year.

The Philippine Statistics Authority said on Friday that the main contributors to the slowdown were the lower inflation rates for housing, water, electricity, gas, and other fuels, declining from 0.9% in May to 0.1% in June; transport, down from 3.5% to 3.1%; and restaurants and accommodation services, falling from 5.3% to 5.1%.

Year-to-date, average inflation stands at 3.5%, keeping it within the government's target range of 2% to 4%. Over the past few months, Rappler reports that inflation has remained at the higher end of this target range.

Furthermore, in the National Capital Region, inflation dipped from 3.1% in May to 2.3% in June, while in areas outside the NCR, inflation remained steady at 4.1%.

By region, the Bangsamoro Autonomous Region in Muslim Mindanao had the highest inflation at 5.3% last month, although this was down from 5.9% in May.

The Ilocos Region recorded the lowest inflation outside the NCR at 2.8%, an increase from the previous 2.3%.

Although inflation eased on a national level, it slightly increased for the Philippines' poorest households. Indeed, for the bottom 30% income households, the inflation rate rose to 5.5% in June from 5.3% in May.

Moreover, food inflation increased from 6.1% in May to 6.5% in June, predominantly due to elevated prices of meat and vegetables.

The National Economic and Development Authority (NEDA) stated on Friday that the onset of the rainy season affected supply, causing the inflation rate for vegetables to rise to 7.2% in June from 2.7% in May.

In addition, the Bangko Sentral ng Pilipinas (BSP) earlier forecast June’s inflation would settle between 3.4% and 4.2%.

However, it is more optimistic about the longer-term inflation outlook. The central bank revised down its risk-adjusted inflation forecast to 3.1% for both 2024 and 2025, down from 3.8% and 3.7%, respectively.