Friday, 05 September 2025, 10:32 am

    Inflation accelerates in August on higher food prices

    Headline inflation accelerated in August, climbing to 1.5 percent from 0.9 percent in July, as food prices—particularly for fish and vegetables—rose amid supply bottlenecks caused by a series of storms and widespread flooding, the Philippine Statistics Authority (PSA) reported on Friday.

    Although still below the 3.3 percent posted in August 2024, the latest figure marks the second consecutive month of upward movement, pushing the year-to-date average to 1.7 percent.

    Despite the acceleration of inflation in August, there remains scope for the Bangko Sentral ng Pilipinas (BSP) to further ease monetary policy after last week’s 50 basis point rate cut. 

    Average inflation for the first eight months of the year remains below the BSP’s target range of 2.0 to 4.0 percent, giving policymakers continued flexibility should growth risks intensify.

    The main driver of the August uptrend was the reversal in food and non-alcoholic beverage prices, which rose by 0.9 percent after falling by 0.2 percent in July. 

    Transport inflation also moderated its rate of decline, easing by 0.3 percentcompared to a 2.0 percent drop the previous month.

    Other commodity groups posted modest increases: household furnishings and maintenance rose to 2.4 percent, health costs to 2.9 percent, information and communication services to 0.6 percent, and personal care items to 2.5 percent.

    In contrast, slower inflation was seen in clothing, housing, recreation, and education, which dropped sharply from 4.2 percent to 2.9 percent.

    Core inflation, which excludes food and energy, rose to 2.7 percent, up from 2.3 percent in July and slightly higher than 2.6 percent in August last year, suggesting underlying price pressures are gradually building.

    For the poorest segment, the PSA reported a 0.4 percent deflation in August from 4.7 percent in August last year, dragged down by sharper year-on-year decline in rice that account for 18 percent of the food basket for the bottom 30 percent income household.

    Economic Planning Undersecretary and National Statistician Dennis Mapa said base effect and a steady rise in cost of food and other consumer goods and services could drive inflation higher in the coming months.

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