The Philippine Statistics Authority (PSA) said Thursday that headline inflation eased to 3.3% in August from 4.4% in July as prices of food and non-alcoholic beverages stabilized. The latest data brought the year-to-date headline inflation to 3.6%, which is within the government's 2 to 4 percent target.
According to the PSA, the downtrend was pushed by the slower annual increment of food and non-alcoholic beverages, which was 3.9% from 6.4% in July.
"This was followed by vegetables, tubers, plantains, cooking bananas and pulses with a year-on-year decline of 4.3% during the month from a 6.1% annual increase in July," the PSA said in a briefing.
"In addition, faster annual declines were noted in the indices of fish and other seafood at 3.1% and sugar, confectionery and desserts at 3.8% during the month from their respective annual decreases of 0.8%and 3.4 percent in the previous month," it said.
National Statistician Dennis Mapa said the headline inflation last month was also lower than the 5.3% recorded in August 2023.
In particular, food inflation eased to 4.2% from 6.7% due to the decline in rice inflation, which decreased to 14.7% from 20.9% in July. It was the lowest rice inflation recorded since the 13.2% recorded in October 2023.
Mapa said rice inflation is expected to decrease to a single-digit level this month due to base effects.
Lower inflation rates were likewise noted in flour, bread, and other bakery products, pasta products and other cereals, 2.4 percent from 2.6 percent; meat and other parts of slaughtered land animals, 4.0 percent from 4.8 percent; and ready-made food and other food products not elsewhere classified, 5.5 percent from 6.0 percent.
Meanwhile, core inflation excludes selected food and energy items, slowed to 2.6% in August 2024 from 2.9% in the previous month.
In a separate statement, the National Economic and Development Authority (NEDA) said the continued easing of inflation and stable prices would significantly benefit households and businesses, promote increased consumer spending, and stimulate economic activity.
"The sustained easing of inflation will support growth in household consumption, which elevated prices have long suppressed. Low-income households will benefit from the decline in food inflation, as food constitutes more than half (51.4%) of the consumption of the bottom 30 percent of households," NEDA Secretary Arsenio Balisacan said.
"Moreover, as businesses have identified persistent inflationary pressure as a significant concern, the recent stability and moderation in inflation will encourage investments, especially as borrowing costs are declining. Most importantly, the appetite for business expansion will improve as consumer spending increases," he added.
Balisacan noted, however, that while inflation continues to trend downward, primarily due to reduced import tariffs on rice, potential pressures could emerge from higher electricity rates and above-normal weather disturbances.
"The government is prepared to address these pressures to ensure stable inflation. Preparations to counter the effects of the La Niña phenomenon are underway, including improvements in early warning systems, the utilization of communication systems to issue warnings about dam openings, measures to address the potential accelerated speed of livestock diseases, and greater involvement of local government units in information dissemination, are in progress. Notably, the government has allocated PHP15 billion for national risk reduction in 2024," Balisacan said.
Balisacan said the Department of Agriculture (DA) will expand the Kadiwa ng Pangulo program in the Visayas and Mindanao to enhance access to affordable agricultural products.
The DA also collaborates with various food manufacturers to supply Kadiwa stores with essential goods, including canned sardines, cooking oil, condiments, fresh fish, and poultry.
In addition, the Energy Regulatory Commission is also urged to expedite the full implementation of the lower retail competition and open access threshold.
The ERC is considering reducing the threshold from 500 kilowatts (kW) to 100 kW, enabling more electricity end-users to participate in the program.
"The government will continue to implement measures to reduce further inflationary pressures, including enhancing agricultural productivity, expanding logistics infrastructure, and ensuring the efficient delivery of social services. These efforts are crucial for stabilizing prices and ensuring that economic growth translates into tangible improvements in the lives of all Filipinos," Balisacan said.
Medium-term inflation path
In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said the latest inflation outturn is consistent with its assessment that inflation would revert to the target range in August after the temporary uptick observed in July due to adverse base effects and the easing of supply pressures for essential food items, particularly rice.
The BSP said the implementation of the rice tariff reduction will help ease inflation in the coming months.
"The balance of risks to the inflation outlook continues to lean toward the downside for 2024 and 2025 with a slight tilt to the upside for 2026. The downside risks are linked mainly to lower import tariffs on rice, while upside risks could come from higher electricity rates and external factors," the BSP said.
The BSP assured that the Monetary Board would continue to take a measured approach to ensure price stability conducive to balanced and sustainable economic and employment growth.
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