The Federation of Philippine Industries (FPI) warned that easing inflation in May offers only limited relief for businesses, as underlying cost pressures continue to weigh on production and investment decisions despite signs of moderation in headline prices.

Headline inflation slowed to 6.8 percent in May, supported by a decline in transport inflation to 16.2 percent. However, core inflation rose to 4.1 percent, signaling that price pressures remain broad-based across the economy rather than confined to volatile items.

For manufacturers, the improvement in headline figures has yet to translate into lower operating costs. Energy and logistics expenses remain elevated, imported input prices are still high, while firms continue to face wage-related adjustments alongside weaker consumer demand.

“The easing is welcome but limited. Core inflation reflects price pressures are still spreading across the economy,” FPI Chair Elizabeth H. Lee said. “We should use this window to push reforms in power, logistics, and food systems so future relief is driven by stronger fundamentals, not temporary factors.”

Lee said industry conditions remain tight, with higher interest rates further constraining borrowing for working capital and expansion.

“Industry is operating in a tight environment marked by elevated costs and cooling demand. Stability and clear reforms will determine whether we can turn these pressures into a more competitive industrial base,” she added.

The FPI also cautioned that recent changes in Senate leadership should not slow down the passage of key economic reforms, stressing the importance of policy continuity for investor confidence.

“Political realignments happen. What businesses need is continuity in economic policy,” Lee said. “Clear priorities on energy, logistics, and competitiveness will reassure both local industry and foreign investors.”

Despite persistent headwinds, the group said the Philippines retains strong investment fundamentals, provided reforms are sustained and implemented effectively.

“We have the fundamentals and the talent. With stability and steady execution, we can turn today’s challenges into tomorrow’s momentum. But we need to get our act together as a country and stay focused on the path forward to prevent conditions from worsening. The opportunity is still within reach — we just need to move with clarity, discipline, and URGENCY,” Lee said.