MANILA -- The Philippines' inflation rate further slowed to 2.4 percent last July, falling neatly within the Bangko Sentral ng Pilipinas’ (BSP) 2.0-2.8 percent forecast and similar to the July 2017 figure.
The central bank, in a statement Tuesday, said the deceleration of domestic inflation rate last July, from month-ago’s 2.7 percent, “is consistent with the BSP’s prevailing assessment that inflation will continue to decelerate in Q3 2019 before firmly settling within the target range of 3.0 percent ± 1.0 percentage point for 2019 and 2020.”
“Ample domestic food supply conditions have supported the continued easing of price pressures,” it said.
“The BSP will keep a close watch over latest economic developments to ensure that the monetary policy stance remains consistent with the BSP’s price stability objective while being supportive of economic growth,” it added.
The Philippine Statistics Authority (PSA) traced the slower inflation rate last July to slower annual rates of the heavily-weighted food and non-alcoholic beverage index at 1.9 percent.
This represents a reversal from developments a year ago, with inflation shooting up to 5.7 percent in July from the previous month’s 5.2 percent due mainly to supply-side factors, particularly the sustained rise of domestic rice prices and lack of supply of several agricultural products, among others.
It peaked at 6.7 percent in September and October last year then continued its downtrend until a one-month uptick last May to 3.2 percent from 3 percent last April.
PSA said annual rate of rice index further slowed to 2.9 percent while index for corn is at -3.0 percent.
The slower domestic inflation rate last month brought the average to date to 3.3 percent, slightly above the mid-point of the government’s 2 to 4 percent target band.
Core inflation, which excludes volatile food and oil items, also posted deceleration to 3.2 percent from the previous month’s 3.3 percent resulting to an average of 3.6 percent.
Monetary officials said base effects are expected in the third quarter of the year because of the high inflation rate during the same period last year.
The BSP forecasts inflation to average at 2.7 percent this year and 3 percent next year. (PNA)
