Inflation eases to 2.4 percent in August

MANILA, Philippines — The country’s headline inflation eased to 2.4 percent in August from 2.7 percent in July, the Philippine Statistics Authority (PSA) said Friday, September 4, 2020.

The latest figure brings the year-to-date inflation for 2020 at 2.5 percent, according to PSA’s report released Friday.

In August 2019, inflation was lower at 1.7 percent.

“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 percent during the period, from 2.4 percent in the previous month,” PSA said.

The actual inflation reported by PSA was slightly lower than the forecast of the Bangko Sentral ng Pilipinas for August. BSP Governor Benjamin Diokno earlier said the agency’s Department of Economic Research projects the inflation rate to settle within the 2.5 to 3.3 percent range for the month.

The central bank earlier projected a slight increase in inflation mainly due to recovering petroleum prices after a sharp decline due to low demand during community quarantines.

According to the PSA, the indices of the following commodity groups also posted lower inflation during the month: alcoholic beverages and tobacco at 17.7 percent; clothing and footwear at 1.9 percent, furnishing, household equipment, and routine maintenance of the house at 3.9 percent; education at 0.1 percent; and restaurant and miscellaneous goods and services at 2.3 percent.

“Contributing also to the deceleration in the overall inflation was recreation and culture whose index exhibited an annual decline of -0.1 percent during the period, from an annual gain of 1.1 percent in the previous month,” PSA noted.

Meanwhile, inflation for housing, water, electricity, gas, and other fuels slightly went up by 0.9 percent, from 0.8 percent in July. Retaining their previous month’s annual growth rates were health at 2.8% percent, transport at 6.3 percent, and communication at 0.3 percent.

According to PSA, core inflation, which excludes selected food and energy items, slowed down to 3.1 percent in August, from 3.3 percent in July.

In August 2019, core inflation was at 2.9 percent.

For food, the annual rate at the national level eased further to 1.7 percent during the month, from 2.5 percent in July. Inflation for food was far lower at 0.3 percent in August 2019.

By food items, the indices for rice and corn dropped by -1.1 percent and -0.6 percent, respectively.

PSA said the index for vegetables also went down by -0.9 percent in August from the 0.9 percent annual hike in July.

“Annual mark-up for the index of oils and fats was higher at 2.4 percent during the month. Likewise, the annual rate for sugar, jam, honey, chocolate and confectionery inched up to 0.1 percent. Meanwhile, annual rates of increments were slower in the indices of the remaining food groups,” the statistics agency added.

For Metro Manila, inflation was posted at 2.2 percent, the same rate recorded in July. In August 2019, inflation in the region was at 1.4 percent.

For areas outside Metro Manila, inflation decelerated to 2.5 percent in August from 2.9 percent in July. In August 2019, inflation in these areas was posted at 1.8 percent.

/MUF