Inflation seen settling at 1.2% in May 

Headline inflation likely further decelerated to 1.2 percent in May due to lower food and oil prices, and a strong peso, an economist said in a report by Philippine News Agency.

In a Viber message, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the strong peso exchange rate versus the US dollar, which was at the 55.50 level lately, could reduce importation costs and overall inflation.

Ricafort said global crude oil prices and other major global commodity prices, such as rice, also recently fell to their lowest level in three years.

He added that better weather conditions, which helped increase agricultural production, raised the local supply and reduced the prices of vegetables, which account for more than one-third of the inflation basket.

"For the coming months, it is possible for inflation to sustain at below 2 percent levels up to August 2025, mathematically due to higher base effects and at 2 percent levels from September-December 2025, for a full-year 2025 average of close to or even slightly below 2 percent," Ricafort said.

He said the within-target inflation would allow the Bangko Sentral ng Pilipinas to further reduce rates.

Headline inflation eased to a five-year low of 1.4 percent in April this year.

Official May 2025 inflation data will be released by the Philippine Statistics Authority on June 6.