The Philippines’ annual headline inflation rate eased to 2.5 percent in July, as lower price increases were noted in utilities and in select commodities.
The National Economic and Development Authority (NEDA) noted that last month’s inflation rate was the lowest in the last 46 months, or almost four years.
“Maintaining stable food prices complements our government’s strategy of significantly reducing hunger and poverty, so we can attain a more inclusive development,” Socioeconomic Planning Secretary Arsenio Balisacan said.
The July inflation was lower compared to the revised 2.7 percent recorded the previous month, and within the 2.2-percent to 3.1- percent forecast range of the Bangko Sentral ng Pilipinas (BSP) for the month.
Data from the National Statistics Office showed that the indices of alcoholic beverages and tobacco; clothing and footwear; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance of the house; recreation and culture; and restaurant and miscellaneous goods and services recorded slower annual increases during the month.
Inflation a year ago was 3.2 percent. NSO added that excluding selected food and energy items, core annual inflation improved to 2.3 percent in July from 2.8 percent in June.
Month-on-month, inflation decelerated to 0.1 percent in July from 0.5 percent in June.
Price mark-ups were posted in food items such as rice, corn, chicken, fish, milk, cheese, eggs and fruits. Increased prices in gasoline and diesel were also noted during the month.
“This was, however, tempered by price reductions in cooking oil, vegetables, sugar and selected spices, condiments and seasonings along with the downward adjustments in electricity rates in some regions,” the NSO explained.
Furthermore, annual inflation in Metro Manila further decelerated to 1 percent in July from 1.6 percent in June, as six commodity groups posted slower annual increments with the housing, water, electricity, gas and other fuels index recording a negative rate. In areas outside Metro Manila, annual inflation slowed down to 2.9 percent in July from 3 percent in June.
Lower annual growths were observed in the indices of alcoholic beverages and tobacco; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance of the house; health; and recreation and culture.
“The downward trend in price increases supports our assessment of benign inflation,” BSP Governor Amando Tetangco Jr. said in a text message to reporters on Tuesday.
He added that as inflation expectations remain well-anchored, the central bank foresees inflation over the policy horizon to be within the government’s 3-percent to 5- percent target range for the 2013.
“That said, this provides BSP room to make any further adjustments to policy stance if needed to address possible effects of changes in the growth trajectory of our main trading partners including United States, Japan and China, and shifts in investor sentiment that could adversely impact the prices of international commodities and capital flows,” Tetangco said.