Consumer prices surged by 4.4 percent in July, surpassing the government's target for the first time this year due to a faster increase in utilities, food, and transportation costs.

According to the Philippine Statistics Authority (PSA), the country’s headline inflation rate last month accelerated from June's 3.7 percent but a slowdown from the 4.7 percent recorded in July 2023.

The last time headline inflation exceeded the four percent threshold was in November 2023, when it reached 4.1 percent.

The Bangko Sentral ng Pilipinas (BSP) projected that July’s inflation would be between 4.0 percent and 4.8 percent.

The Marcos administration targets maintaining the country’s inflation rate at 2.0 percent to 4.0 percent in 2024.

The latest readout brings the average inflation rate from January to July to 3.7 percent, still within the government’s target band.

The main contributors to the increase in inflation rate during the month were housing, water, electricity, gas, and other fuels (0.1 percent to 2.3 percent); food and non-alcoholic beverages (6.1 percent to 6.4 percent); and transport (3.1 percent to 3.6 percent).

On the other hand, rice, which was still the biggest contributor to inflation, declined to 20.9 percent from 22.5 percent in the previous month.

PSA Undersecretary Claire Dennis S. Mapa said that the three classes of rice that the agency monitors all declined during the month, with regular milled rice dropping to P50.90 from P51.10 in June.

The prices of well-milled rice and special rice also declined to P55.85 and P64.42, respectively, from P55.96 and P64.56.

Mapa added that the rice tariff cut and base effect will most likely impact and reduce the rice inflation to less than 20 percent in August.

Inflation for the bottom 30 percent of households also rose to 5.8 percent in July, the highest level in seven months, bringing the inflation average to 4.9 percent.

Housing, water,
electricity, gas, and other fuels (0.7 percent to 1.8 percent), food and non-alcoholic beverages (8.0 percent to 8.3 percent), and transport (3.0 percent to 3.6 percent) were the main contributors to the acceleration of inflation for poor households.

Mapa explained that food’s contribution to their inflation was more substantial than that of all households, which was recorded at 51.38 percent compared to 34.78 percent.

“Yung bigas, ang weight niya sa consumption basket ng bottom 30 percent income household ay mga around 18 percent, versus doon naman sa all income household na mga about 8.9 percent,” he said.

National Economic and Development Authority Secretary Arsenio M. Balisacan said that the government will implement measures to stabilize commodity prices and reduce inflation.

“The government is relentlessly working to address our nation’s most pressing concern of ensuring food security for every Filipino amid the faster rise in prices in July and the expected typhoons and rains due to the onset of La Niña this August,” Balisacan said, noting that the weather phenomenon is expected to persist until the first quarter of 2025.

He also added that the government will provide around P510 million in fuel subsidies to crop, livestock, and poultry farmers; while around 160,000 farmers will benefit from over P3,000 in fuel assistance between August and September.