INFLATION eased to a three-month low of 2.4% in August, bringing the average inflation to 2.5% so far this year, the Philippine Statistics Authority reported this morning.

Last month’s year-on-year inflation rate was slower than 2.7% in July 2020, but faster than the 1.7% in August 2019.

The latest reading, which was below the median estimate of 2.8% in a BusinessWorld poll conducted last week, fell at the low end of the Bangko Sentral ng Pilipinas’ 2.5%-3.3% forecast range for August. This was also the lowest since the 2.1% inflation rate in May 2020.

“The slowdown in inflation in August 2020 was primarily due to the deceleration in the inflation for the heavily-weighted food and non-alcoholic beverages, which slid at an annual rate of 1.8% during the period from 2.4% in the previous month,” the PSA said in a statement.

Year to date, inflation averaged 2.5%, still within the BSP’s 2-4% target band and slower than the 2.6% forecast for the entire 2020.

Core inflation, which excludes volatile prices of food and fuel, settled at 3.1% in August. This was slower than 3.3% in July, but faster than the 2.9% logged in August 2019.

Food-alone inflation eased to 1.7% from 2.5% the previous month, but was faster than the 0.3% a year ago.

Moreover, inflation for the bottom 30% income households logged in at 2.7%, slower than July’s 2.9%, albeit faster than August 2019’s 1.7%. In the eight months to August, inflation for this segment also settled at 2.7%

The consumer price index (CPI) for the bottom 30% modifies the model basket of goods to reflect the spending patterns of the poor. This compared to the headline CPI which measures inflation as experienced by the average household. — Marissa Mae M. Ramos

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