Philippines Inflation Rate Hits 2-Year Low of 2.4%


The Philippines' annual inflation rate fell to a two-year low of 2.4 percent in July 2019 from 2.7 percent in the previous month and in line with market expectations. Food inflation reached its lowest in nearly three years and there was a noticeable slowdown in prices of both housing and transport.

The central bank set an inflation target range of between 2 to 4 percent from 2018 to 2020.

Year-on-year, prices of food and non-alcoholic beverages increased by 1.9 percent in July, slowing markedly from a 2.7 percent rise in June. It was the lowest food inflation since September 2016, amid falls in prices of corn (-3 percent), rise (-2.9 percent), bread and cereals (-1.5 percent), and sugar, jam, honey (-1.4 percent); while prices rose further for food products, n.e.c (6.7 percent); fruits (6.6 percent); fish (3.8 percent); meat (3.5 percent); vegetables (3.4 percent);ther cereals, flours, cereal preparation, bread, pasta and other bakery products (3.3 percent); milk, cheese and egg (2.4 percent); and oils and fats (2.5 percent).

In addition, prices eased for and alcoholic beverages and tobacco (9.3 percent vs 9.5 percent in June); housing, water, electricity, gas and other fuels (2.2 percent vs 3 percent); health (3.2 percent vs 3.7 percent); transport (0.7 percent vs 1.6 percent); and furnishing, household equipment and routine maintenance (2.9 percent vs 3.1 percent). At the same time, inflation was steady for communication (at 0.3 percent), recreation and culture (at 3.2 percent), and restaurant and miscellaneous goods and services (at 3.3 percent), while cost of education rebounded sharply (4.2 percent vs -4.5 percent). 

On a monthly basis, consumer prices rose by 0.2 percent in July, after a 0.1 percent gain in June. Prices advanced for alcoholic beverages and tobacco (0.8 percent); clothing and footwear (0.4 percent); furnishing, household equipment and routine maintenance (0.3 percent); health (0.4 percent); recreation and culture (0.1 percent); education (2.1 percent), and restaurants & miscellaneous goods and services (0.3 percent). Meantime, cost was flat for both food and non-alcoholic beverages; and housing, water, electricity, gas and other fuels, while, cost of transport dropped (-0.3 percent).

Philippines Inflation Rate Hits 2-Year Low of 2.4%


PSA l Rida Husna | rida@tradingeconomics.com
8/6/2019 2:08:29 AM