According to the Philippine Statistics Authority (PSA), the Philippine inflation rate increased in July after a slowdown in June despite a faster rise in utilities, food, and transportation costs.
Inflation measures the rate of increase in the prices of goods and services. At a press conference, National Statistician and PSA chief Claire Dennis Mapa said inflation accelerated to 4.4% last month.
The rate soared faster than the previous month’s 3.7% rate but is still lower than the 4.7% rate in July 2023. This is the first time the inflation rate has breached the government’s target range since November 2023.
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However, the year-to-date average inflation is at 3.7%, which is still within the government’s ceiling of 2 to 4%. The rate also fell between the Bangko Sentral ng Pilipinas’ (BSP) 4 to 4.8% forecast range.
“Ang pangunahing dahilan ng mas mataas na antas ng inflation nitong Hulyo 2024 kaysa noong Hunyo 2024 ay ang mas mabilis na pagtaas ng presyo ng housing, water, electricity, gas and other fuels sa antas na 2.3%,” Mapa said.
For the first half of July, the inflation had averaged to 3.5%, due to the high rice prices that were expected to continue until July. However, the increased rate this month isn’t a total surprise as it was already expected by the BSP and the Department of Finance.
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BSP Governor Eli Remolona Jr. stated that, according to their projections, inflation peaked in July and is anticipated to start declining towards the government’s target.
A day before the inflation rate data was released, Remolona mentioned that the central bank could begin to cut its key policy rate if inflation-related price increases ease. Hence, this would mark the first rate adjustment since the BSP began holding the policy rate steady at 6.5% in October 2023.
“If price pressures continue to ease, it will be possible for BSP to consider a less restrictive monetary policy stance,” Remolona said during the budget briefing of the House of Representatives on Monday, August 5.
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