INFLATION eased to 6.1 percent in August from 6.2 percent a month earlier amid slower increases in food, housing, utility and energy costs, the Philippine Statistics Authority (PSA) reported on Friday.
Consumer price growth has now slowed for four straight months, but the rate remains well above the Bangko Sentral ng Pilipinas’ (BSP) 2.0- to 4.0-percent target.
The August result fell within the central bank’s 5.5- to 6.5-percent forecast for the month but was slightly higher than the 6.0-percent median in a Manila Times poll of economists.
Core inflation, which excludes selected volatile food and energy items, also edged down to 4.1 percent from 4.2 percent.
The BSP, which last week raised key interest rates by another 25 basis points to keep inflation expectations anchored, on Friday said it would continue to monitor developments in the Middle East and weather-related disturbances as it assesses the inflation outlook.
Metrobank economist Nicholas Antonio Mapa said the slight easing came despite faster inflation in transport and health services, adding that the latest reading supported the BSP’s measured approach to monetary policy.
The PSA said the August moderation was primarily driven by food and nonalcoholic beverages, whose inflation eased to 4.6 percent from 5.2 percent in July.
Vegetables, tubers, plantains, cooking bananas and pulses provided the biggest relief within the food group, with inflation reversing to -3.4 percent in August from 8.4 percent in July.
Fish and seafood inflation also slowed to 6.6 percent from 7.8 percent.
Housing, water, electricity, gas and other fuels, meanwhile, also posted slower inflation of 7.9 percent in August from 8.2 percent in July, helping temper overall price pressures.
The easing in food prices was partly offset by faster increases in rice and transport costs. Rice inflation, in particular, accelerated to 19.4 percent in August from 17.1 percent in July.
“Rice is really contributing a substantial percentage of the overall inflation,” National Statistician Claire Dennis Mapa said, noting that the staple accounts for about 8.9 percent of the consumer basket.
Transport inflation, meanwhile, rose to 13.5 percent from 11.9 percent.
The increase was driven in part by higher fuel prices. Diesel inflation jumped to 55.7 percent from 38.6 percent while gasoline inflation rose to 36.2 percent from 34.1 percent.
Mapa said the continued decline in headline inflation was encouraging but warned that the trend could reverse.
“While it is still high, the trend is going down. But as I’ve said, there are still items that could trigger a reverse in trend,” he said, pointing to weather-related disruptions that could put pressure on food prices in the coming months.
The PSA’s provincial offices reported higher vegetable prices during the last week of August following recent bad weather and flooding, even as vegetable inflation for the full month remained negative.
“Our expectation is that the movement will change for the month of September,” Mapa said.
Socioeconomic Planning Secretary Arsenio Balisacan, meanwhile, said the moderation in key inflation drivers, particularly food, “gives us confidence that we are moving in the right direction.”
