Inflation eases further to 2.4% in July

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The increase in the prices of widely used goods further eased in July, the Philippine Statistics Authority (PSA) reported this morning.

Preliminary data from the PSA showed headline inflation at 2.4% last month, down from 2.7% in June and 5.7% in July 2018. It matched the 2.4% inflation reading that was recorded in July 2017 and the slowest since December 2016 when it logged in a 2.2% inflation rate.

The July result fell within the Bangko Sentral ng Pilipinas’ (BSP) 2%-2.8% forecast for the month and matched the 2.4% median estimate in BusinessWorld’s poll of 18 institutions conducted late last week.

Year to date, inflation averaged 3.3%, past the midpoint of the BSP’s 2-4% target band for 2019 albeit still above the revised 2.7% full-year forecast average.

Core inflation – which excludes volatile food and energy items in the consumer basket – was 3.2% last month, slower than June’s 3.3% and 4.5% in the same period last year.

“The downtrend was primarily brought about by the slower annual rate posted in the index of the heavily-weighted food and non-alcoholic beverages at 1.9% [from 2.7% in June],” the PSA said in a statement.

The food-alone index likewise eased to 1.7% in July versus the 2.6% reading in June and 6.8% in July 2018.

Slower annual increments were also observed in alcoholic beverages and tobacco (8.8% from June’s 9.3%); housing, water, electricity, gas and other fuels (2.2% from 3%); furnishing, household equipment and routine maintenance of the house (2.9% from 3.1%); and transport (0.7% from 1.6%). — Marissa Mae M. Ramos