PHILIPPINE INFLATION eased to a seven-month low in July, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary data from the PSA showed headline inflation at 4.0% in July, slowing from the year-on-year rate of 4.1% in June. Still, this was above the 2.7% print recorded in July last year.

The latest headline figure matched the median of the BusinessWorld poll conducted last week. It also fell within the 3.9%-4.7% estimate given by the Bangko Sentral ng Pilipinas (BSP) for July.

The July result marked the slowest in seven months, or since the 3.5% annual rate posted in December 2020. Prior to that, the inflation in June was at a six-month low.

The inflation in July also marked the first time since December that it settled within the BSP’s 2-4% inflation target for the year.

Year-to-date inflation settled at 4.4%, still above this year’s target and above the forecast of 4% for the entire year.

Core inflation, which discounted volatile prices of food and energy items, stood at 2.9%. This was slower than the 3% in June and 3.3% in July 2020. It averaged 3.3% so far this year.

On the other hand, the inflation rate for the bottom 30% of income households slightly picked up to 4.4% in July from 4.3% the previous month. It was also faster than the 2.9% recorded in July last year. So far, bottom 30% inflation averaged 4.8% for the year.

The inflation rate for the bottom 30% takes into account the spending patterns of this income segment. Thus, its consumer price index differs from that of the average household with the former assigning heavier weights on necessities. – Nadine Mae A. Bo