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Inflation picks up in July

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The overall year-on-year increase in prices of widely used goods quickened slightly in July, the Philippine Statistics Authority (PSA) reported this morning.

Preliminary data from the PSA showed headline inflation at 2.7% last month, picking up from the 2.5% pace in June, albeit still slower than the 2.4% rate in July 2019.

The July figure is higher than the 2.6% median in a BusinessWorld poll conducted late last week and falls within the 2.2%-3% estimate given by the Bangko Sentral ng Pilipinas (BSP) for July.

Year to date, inflation settled at 2.5%, still within the BSP’s 2%-4% target band and above the 2.3% forecast for the entire 2020.

Core inflation, which discounted volatile prices of food and fuel, stood at 3.3% in July, accelerating from three percent the previous month and 3.2% logged last year.

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Food-alone inflation eased to 2.5% from 2.7% the previous month, but faster than 1.7% a year ago.

Moreover, the PSA reported preliminary figures for inflation as experienced by low-income households for July. That month, the inflation rate for the bottom 30% of income households was 2.9%, slower than June’s three percent, but faster than July 2019’s 2.5%.

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. – Lourdes O. Pilar

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