Headline inflation in July of 1.9 percent year-on-year was unchanged from the previous month and was within the BSP’s forecast of 1.5-2.4 percent for the month. The resulting year-to-date average inflation rate of 1.4 percent was still below the Government’s inflation target range of 3.0 percent ± 1.0 percentage point for 2016. Core inflation, which excludes certain volatile food and energy items to measure underlying price pressures, also remained at 1.9 percent in July. On the other hand, month-on-month seasonally-adjusted headline inflation was lower in July at 0.1 percent from 0.3 percent in June.
Both food and non-food inflation were relatively steady during the month. Non-food inflation was unchanged as lower water rates and rollbacks in domestic petroleum prices, were offset by higher inflation of household furnishings as well as goods and services under recreation and culture. Meanwhile, food inflation eased slightly in July due to slower price increases of selected food commodities such as, meat, vegetables, sugar, milk, cheese, and eggs. In contrast, year-on-year rice inflation was nil during the month after declining for 11 consecutive months as rice prices increased with the onset of the lean harvest season.
Governor Amando M. Tetangco, Jr. noted that latest inflation reading was in line with the BSP’s assessment that inflation will follow a target-consistent path over the policy horizon. Going forward, the BSP will remain watchful of external developments and evolving price trends to ensure price stability conducive to a balanced and sustainable economic growth.