The government attributed the easing of inflation in July to lower transport costs, improving supply conditions, and sustained interventions, even as officials vowed to continue measures aimed at stabilizing food prices and shielding vulnerable households from rising living costs.

The Philippine Statistics Authority (PSA) reported on Wednesday, Aug. 5, that headline inflation slowed for a third straight month to 6.2 percent in July from 6.4 percent in June, while core inflation—which excludes selected volatile food and energy items—eased to 4.2 percent from 4.4 percent. The year-to-date average inflation rate stood at five percent, still above the government’s two- to four-percent target range.

According to the Department of Economy, Planning, and Development (DEPDev), the slowdown was primarily driven by lower transport inflation, which eased to 11.9 percent in July from 12.8 percent in June as fuel prices declined and supply conditions improved.

Food inflation remained steady at 5.3 percent as lower meat prices and slower increases in vegetable prices offset faster rice inflation.

“Every peso saved from slower price increases means more room for the family budget for food, transport, education and other essential needs,” DEPDev Secretary Arsenio M. Balisacan said.

“While challenges remain, particularly in managing food price pressures, these results show that our interventions are making a difference in easing the impact on Filipino households,” the DEPDev chief added.

Within the cereals and cereal products group, rice remained the largest contributor to inflation, accounting for 74.4 percent of the group’s inflation, or 3.9 percentage points (ppts). Overall, the biggest contributors to headline inflation were food and non-alcoholic beverages, housing, water, electricity, gas and other fuels, and transport.

For the bottom 30 percent of income households, however, inflation remained significantly higher at 8.2 percent in July, bringing the seven-month average to 5.9 percent. Food and non-alcoholic beverages remained the biggest contributor, followed by housing, water, electricity, gas and other fuels, and transport.

DEPDev said the government will sustain targeted interventions through the UPLIFT Committee to cushion vulnerable sectors from higher prices and other economic shocks.

Among these measures, the government had released ₱2.09 billion, or 84 percent of the ₱2.5-billion Fuel Subsidy Program, benefiting 498,570 public utility vehicles (PUVs) as of July 24. Another ₱356.1 million in fuel assistance had also been provided to 89,551 PUV drivers under the ₱10-per-liter Fuel Subsidy Program.

To strengthen food security, the Department of Agriculture (DA) is set to complete 380 mechanical drying systems by 2027 to reduce post-harvest losses, improve rice quality, raise farmers’ incomes, and strengthen domestic rice supply. The government is also intensifying the distribution of seeds and fertilizer in water-abundant rice-growing areas in Southern Luzon, Visayas, and Mindanao while continuing assistance to farmers in drought-affected areas.

Over the longer term, DEPDev said the government will continue advancing power sector reforms under the Philippine Energy Plan (PEP) 2023-2050 by accelerating the implementation of renewable energy (RE) contracts and ensuring the full delivery of awarded capacity to reduce reliance on imported fuels. These efforts support the target of adding 25 gigawatts (GW) of RE capacity by 2035.

“While inflation is moving in the right direction, our work is far from over. We will continue advancing measures to keep essential goods affordable while creating more opportunities for a better quality of life,” Balisacan said. - Danielle T. Bayani