MANILA - Soaring food prices and utility costs bumped up inflation in the Philippines to its highest in two-and-a-half years in May, touching 4.5 per cent from 4.1 per cent in April and 2.6 per cent a year earlier.
The rate - which represents how quickly prices of basic goods and services are rising - was also the fastest since November 2011, when it stood at 4.7 per cent. The central bank had expected annual inflation in May at 3.9 per cent to 4.7 per cent. Analysts had forecast 4.2 per cent.
In a statement, the government's economic managers said inflation would stay within their target of 3 per cent to 5 per cent for the year.
Economic Planning Secretary Arsenio Balisacan cautioned, though, that "the balance of risks to the inflation outlook remains slightly tilted toward the upside".
"Potential increases in food prices may emanate from weather disturbances such as the possibility of an imminent El Nino (a dry spell), the depreciating peso, and the pending petitions for further adjustments in utility rates, transport fares and wages," he warned.
Food prices soared 7.1 per cent in May from 6.5 per cent in April due to short supply, a dry spell and a rat infestation in two big agricultural regions south of the capital Manila, the National Economic and Development Authority reported.