Inflation lowest in 7 months, slows to 3.3% in August

The Philippines’ overall inflation rate eased to its slowest of 3.3% in seven months, or since the 2.8% print in January 2024, the Philippine Statistics Authority (PSA) reported on September 5.

As the price increase in food and transport costs were moderated, the latest figure went down by a full point from July’s inflation print of 4.4% and lower than the 5.3% logged in August of the previous year. 

This brought the year-to-date inflation print in the first eight months of 2024 to 3.6%, a slowdown from the 5.3% rate in the same period last year and still within the government’s ceiling of 2% to 4%.

The PSA attributed the downtrend in overall August inflation to the slower increase of food and nonalcoholic beverages at 3.9% (from 6.4%) and transport costs at -0.2% (from 3.6%).

“The deceleration of food inflation in August 2024 was primarily brought about by the slower inflation rate of rice with 14.7% in August 2024 from 20.9% in the previous month,” the PSA said in its report.

However, it also noted higher annual increases of several non-food commodities. 

“On the contrary, the index of housing, water, electricity, gas and other fuels exhibited a higher annual increase of 3.8% during the month from 2.3%in July 2024,” it added.

Following the national trend, inflation in Metro Manila eased to 2.3% from 3.7% on the back of slower increments in the indices of food and nonalcoholic beverages at 2% (from 5.2%) and transport to 0.1% (from 3.5%).

Inflation for areas outside the Metro stood at 3.6% (from 4.6%) month-on-month also on the back of slower annual increase in the food and non-alcoholic beverages index at 4.3% (from 6.6%) month-on-month as well as transport which saw a decline to 0.2% (from 3.6%).

In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said lower rice tariffs would help ease inflation in the coming months, with risks to inflation continuing to tilt on the downside this year and the next, and a “slight tilt to the upside” for 2026.

“Going forward, the Monetary Board will continue to take a measured approach in ensuring price stability,” the BSP said.

The BSP previously forecasted that the August inflation would fall within the range of 3.2% to 4%.

The central bank also identified upward price pressures from higher electricity rates and increased agricultural prices, driven by “unfavorable weather conditions,” such as the billions of pesos in agricultural losses caused by Typhoon Carina (Gaemi) and the southwest monsoon or habagat in late July.