July Inflation Higher at 2.8 Percent

Headline inflation rose to 2.8 percent year-on-year in July from 2.7 percent (revised) in June. The resulting year-to-date average inflation rate of 3.1 percent was in line with the Government's target range of 3.0 percent 1.0 percentage point for 2017. Meanwhile, core inflation�which excludes certain volatile food and energy items to measure underlying price pressures�decelerated to 2.1 percent in July from 2.6 percent in the previous month. On a month-on-month seasonally-adjusted basis, headline inflation rose to 0.3 percent in July from -0.1 percent in June.

The July inflation rate rose slightly as a result of non-food components, in particular the Philippine National Railways (PNR) fare increase, upward price adjustments for gasoline and diesel products, the increase in electricity rates due to higher generation charges, and higher rental rates for housing. Meanwhile, food inflation eased as most food items such as, rice, meat, oils and fats, as well as fruits posted slower price increases relative to year-ago levels while items such as corn, vegetables, and sugar, jam, honey, chocolate registered negative inflation rates.

Governor Nestor A. Espenilla, Jr. said that the latest inflation outturn is consistent with the BSP's assessment of a manageable inflation outlook over the policy horizon. Looking ahead, the BSP will continue to closely monitor domestic and external developments to ensure that the monetary policy stance remains in line with price and financial stability.

Source: Bangko Sentral ng Pilipinas (BSP)

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