Consumer price growth in the country slowed to a seven-month low in August, primarily due to easing food and transport costs, the Philippine Statistics Authority (PSA) reported.
National Statistician and PSA Undersecretary Claire Dennis S. Mapa said that headline inflation plummeted to 3.3 percent in August from 4.4 percent in July and 5.3 percent in the same month last year.
The August inflation rate fell within the lower range of the Bangko Sentral ng Pilipinas’ projection of 3.2 percent to four percent.
Additionally, last month’s rate was the slowest since January, when it was recorded at 2.8 percent.
As a result, the average inflation rate has decreased to 3.6 percent in the first eight months of the year, comfortably within the Marcos administration's target range of two percent to four percent.
The slowdown in inflation was mainly due to a drop in food inflation, which fell to 4.2 percent from 6.7 percent the month before. This decrease is largely because of a notable drop in rice inflation, which dropped to 14.7 percent from 20.9 percent the previous month.
The main contributors to the slowdown in August inflation were food and non-alcoholic beverages, which accounted for 69.9 percent of the decrease, and transport, which made up 25.4 percent.
In contrast, rice (32.7 percent), restaurants and cafes (13.2 percent), rentals (9.4 percent), liquified petroleum gas (6.7 percent), and electricity (4.4 percent) were the top five contributors to the August inflation.
Meanwhile, inflation for the bottom 30 percent of households also declined to 4.7 percent in August from 5.8 percent in July, bringing the inflation average to 4.9 percent.
Mapa stated that the government's decision to lower tariffs on rice imports positively impacted inflation.
Meanwhile, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said that the easing inflation will increase household spending, which has been limited by high prices.
“Low-income households will benefit from the decline in food inflation, as food constitutes more than half (51.4 percent) of the consumption of the bottom 30 percent of households,” he added.
Balisacan emphasized that businesses have been worried about high inflation, but with prices now stable and borrowing costs going down, they’re more likely to invest. Increased consumer spending will also boost business expansion.
“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 not only for stabilizing prices but also for ensuring that economic growth translates into tangible improvements in the lives of all Filipinos,” he concluded. (Derco Rosal)