Headline inflation climbed to 12.5 percent year-on-year in August from 12.3 percent (revised) in July, bringing the year-to-date average to 8.8 percent. August inflation, the highest level since December 1991, was within the 11.8-12.6 percent forecast range of the Bangko Sentral ng Pilipinas (BSP) for the same month. Except for food, beverages, and tobacco, all major commodity groups posted higher inflation rates relative to their levels in the previous month. The increase in the prices of the food, beverages, and tobacco group slowed down for the first time since November 2007. Month-on-month headline inflation was also lower for the second consecutive time at 0.3 percent in August from 1.6 percent (revised) in July. However, core inflation, which excludes certain specific food and energy items to obtain an underlying measure of generalized price pressures, was higher at 7.0 percent year-on-year in August from 6.3 percent in July.
Higher prices of petroleum products pushed inflation up in August. While domestic pump prices of petroleum products declined in August relative to July, lower prices a year ago yielded higher year-on-year inflation in August. By contrast, rice posted lower year-on-year price increase in August compared to July, reflecting the easing trend in the global price of rice since June.
Governor Amando M. Tetangco, Jr. stressed that “the BSP will continue to monitor developments that can impact on inflation, including movements in global oil and food prices, to be able to craft monetary policy that is consistent with its price stability objective.”