Inflation is expected to edge up in August to between 1.4 percent and 1.5 percent, following July’s six-year low, according to Jesus Mariano “Manny” Ocampo, president and COO of the Investment & Capital Corporation of the Philippines (ICCP). The anticipated uptick is attributed to flood-related supply disruptions in agriculture and the delayed impact of U.S. tariffs on select exports.
While July’s slowdown—driven by easing prices for utilities and food—gave households a boost and lifted consumer spending, Ocampo warns that typical seasonal inflationary pressures ahead of the ‘ber’ months could now begin to materialize.
Despite the projected rise, inflation is expected to remain below the government’s 2 percent target, providing continued support for economic growth. Ocampo emphasized that the benign inflation outlook gives the Bangko Sentral ng Pilipinas (BSP) room to cut policy rates by up to 50 basis points before year-end, offering potential relief to both businesses and households through lower borrowing costs.
On the external front, Ocampo noted that recent U.S. tariffs affect only a third of Philippine exports, leaving core sectors like semiconductors and BPO services largely unscathed. He urged policymakers to capitalize on this by improving market access for Philippine food exports and ramping up investment in manufacturing, energy, and infrastructure to close capacity gaps and drive inclusive growth.
ICCP maintains that risks to inflation remain manageable, and strategic capital deployment will be crucial in sustaining the country’s medium-term economic momentum.
