Philippine inflation slows to record 0.8 percent in July, says government
Philippine inflation slowed to a record low of 0.8 percent year-onyear in July on lower electricity, petrol and transportation costs, the government said on Wednesday.
The rate of inflation was within the central bank’s forecast of 0.5 percent to 1.3 percent, but marked a steep fall from June’s year-onyear rate of 1.2 percent, according to the Philippine Statistics Authority (PSA).
Petrol, electricity and water prices decreased by 1.1 percent last month while transportation prices declined 0.5 percent. Inflation for food and non-alcoholic beverages slowed to 1.3 percent, the PSA said.
The figures were released ahead of a central bank meeting on interest rates next week, with authorities under pressure to help spur slowing economic growth.
“We will see at our meeting next week if there is (a) need for any adjustments to our stance of policy,” central bank governor Amando Tetangco said in a statement following the release of the inflation data.
Tetangco said average inflation for the full year would likely fall “close to the lower end” of the bank’s 2.0 percent to 4.0 percent target.
“We will monitor developments, especially those from external sources, that may raise volatility in financial markets or impact on inflation expectations,” he said.
The monetary authority has kept its benchmark overnight borrowing and lending rates at 4.0 percent and 6.0 percent respectively since last year.
Year-on-year economic growth slowed to a three-year low of 5.2 percent in the first quarter of this year due to lethargic government spending and weak exports.
It was the worst expansion for what has recently been one of Asia’s fastest-growing economies since the last quarter of 2011, when it grew by 3.8 percent.
The slowdown also imperiled the government’s 7.0 percent to 8.0 percent growth target for the year.