The monetary authorities project inflation, or the rate of change in prices, to moderate in August from a low of 3.2 percent to no more than 4 percent. This compares with headline inflation averaging 4.4 percent in July.
According to the Bangko Sentral ng Pilipinas (BSP), higher electricity rates and higher prices of agricultural commodities, owing to unfavorable weather conditions, are the primary sources of upward price pressures for the month.
“These factors are expected to be offset by lower domestic oil prices as well as lower rice, fish, and meat prices along with the peso appreciation,” the BSP said.
Market analysts forecast the headline inflation rate in July at only 4 percent but were frustrated by the food, housing and utilities components of the consumer price index (CPI) rising higher than most projected.
But core inflation, which removes volatile food and oil from the CPI basket, eased in July to only 2.9 percent from 3.1 percent in June.
Going forward, the policy-making Monetary Board of the BSP, will continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment.
