Inflation in the Philippines registered a modest increase of 1.4% in April 2023, marking the slowest rate in more than five years.

This follows a decline from 1.8% in March, as reported by the Philippine Statistics Authority (PSA).

The latest figures represent the lowest inflation rate since November 2019's rate of 1.2%, prior to the onset of the pandemic.

The April inflation rate significantly falls below the government's target range of 2% to 4% but remains within the Bangko Sentral ng Pilipinas (BSP) forecast range of 1.3% to 2.1%.

The cumulative average inflation rate for the first four months of the year stands at 2%.

Core inflation, which excludes certain food and energy items, remained stable at 2.2% during this period.

The PSA attributed the deceleration in inflation largely to restrained price increases in food and non-alcoholic beverages, which saw a rise of only 0.9% compared to 2.2% in March.

Significantly impacting the overall inflation rate was the continued decline in rice prices, which decreased by 10.9% after a 7.7% decline in March, marking the tenth consecutive month of deflation in this category.

These trends have been attributed to lower local farmgate prices and reduced costs associated with imported rice.

Transport costs also contributed to the downward trend, with the transport index dropping by 2.1% year-on-year, a notable decrease from the 1.1% decline experienced in the previous month.

Conversely, inflation rates for housing, water, electricity, gas, and other fuels saw an increase, rising to 2.9% from 1.7%, while health-related inflation rose to 2.4% from 2.2%.

Similarly, inflation for alcoholic beverages and tobacco experienced a slight uptick, increasing to 3.7% from 3.6%.

In Metro Manila, inflation rose to 2.4% in April from 2.1% in March, marking a break in a three-month trend of declining rates.

This increase was driven primarily by significant hikes in costs associated with housing and utilities, which surged by 5.1% from 2.2% in the previous month.

The PSA noted that the rise in electricity prices contributed to this uptick, accelerating to 5.4% from the deflation observed in March.

Additionally, health and accommodation services experienced faster annual price increases.

The BSP, in a statement issued on May 6, indicated that the inflation data supports a perception of a manageable inflation environment.

The decline in commodity prices resulted in a downward revision of their inflation forecasts.

The central bank anticipates that inflation risks will remain balanced over the next two years.

It also highlighted that potential increases in transport, meat, and utility prices could exert upward pressure on inflation, though lower rice import tariffs and diminished global demand may alleviate price escalations.

In light of recent trends, the BSP has decreased key borrowing costs from 5.75% to 5.5%, a measure aimed at mitigating the potential adverse impacts of a challenging external economic landscape on domestic growth.

Officials from the Department of Planning, Economy, and Development (DEPDev) remarked on the sustained decrease in inflation, attributing it to effective policy implementation focused on food price reductions.

They emphasized ongoing strategies to monitor price fluctuations and mitigate inflationary pressures, particularly concerning essential commodities.

Continuous engagement between government agencies was urged to maintain price stability.