Inflation picks up to 2.7% in July
THE COUNTRY’S HEADLINE Inflation ACCELERATED for the second straight month to 2.7 percent in July from 2.5 percent in June on the back of higher transportation fares, the Philippine Statistics Authority (PSA) announced on Wednesday.
The latest figure is higher than the 2.4 percent posted in the same month last year, and puts the yearto-date average at 2.5 percent, well within the government’s 2.0- to 4.0-percent target range.
The statistics agency attributed the acceleration to “the jump in the inflation [for] the transport index at 6.3 percent during the month from 2.4 percent in June 2020.”
According to National Statistician Dennis Claire Mapa, inflation for the tricycle fare index picked up to 33.9 percent in July from 26.8 percent in June; domestic airfare index, 12.6 percent from 0.2 percent; and ferry/ship index, 27.7 percent.
As an example, he said the average
tricycle fare for each passenger was P17 last month, compared to about P8.50 in July 2019.
Higher annual increments were also recorded in the indices of select commodity groups, such as alcoholic beverages and tobacco at 19.3 percent; housing, water, electricity, gas and other fuels, 0.8 percent; and restaurant and miscellaneous goods and services, 2.5 percent.
Inflation for the food index eased further to 2.5 percent last month from 2.7 percent in June.
Among the food groups, increments in the indices of rice and of sugar, jam, honey, chocolate and confectionery continued to slow to 1.2 percent and 0.1 percent, respectively.
But faster increases in the indices of other food groups were noted: meat, to 4.9 percent; oils and fats, 2.3 percent; and food products not elsewhere classified, 5.7 percent.
Mapa said the PSA was looking out for the possible effects of the imposition of the modified enhanced community quarantine ( MECQ) on consumer prices, “because the supply chain might be affected, and that would “result [in increases in the prices of] food items.”
Meanwhile, inflation for poor households slowed to 2.9 percent in July from 3.0 percent in June, mainly driven by the slower annual growth rate in the heavily weighted food and non-alcoholic beverages index at 1.5 percent.
Consumer price growth in the National Capital Region accelerated to 2.2 percent in July from 2.0 percent a month earlier, but decelerated from 2.3 percent year-on-year. Inflation outside the
capital also picked up to 2.9 percent last month from 2.7 percent in June and 2.4 percent in July 2019.
Responding to the latest data, the National Economic and Development Authority (NEDA) said in a statement that national and local governments needed to strengthen risk management systems to ensure the unhampered and sufficient supply and delivery of essential commodities that would support stable inflation.
“Although we expect that the overall consumer prices will remain benign until 2021, we recognize that the upside risks to the inflation outlook still remain,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua said.
With Metro Manila and nearby provinces under MECQ until August 18, Chua emphasized the need to prevent a recurrence in supply chain disruptions, especially for food supplies and basic necessities.
In a statement, the Bangko Sentral ng Pilipinas said the July inflation figure was consistent with its prevailing assessment that consumer price growth is expected to remain benign over the policy horizon, largely because of the potential adverse impact of the coronavirus pandemic on domestic and global economic prospects.
The latest baseline forecasts indicate that inflation is likely to settle close to the midpoint of the government’s target range for 2020 to 2022, it added.