Headline inflation in August eased to 1.8 percent year-on-year from 1.9 percent in the previous month and was within the BSP’s forecast of 1.6-2.4 percent for the month. The resulting year-to-date average inflation rate of 1.5 percent was still below the Government’s inflation target range of 3.0 percent ± 1.0 percentage point for 2016. Meanwhile, core inflation, which excludes certain volatile food and energy items to measure underlying price pressures, increased to 2.0 percent in August from 1.9 percent in July. Month-on-month seasonally-adjusted headline inflation was steady in August at 0.1 percent.
The lower August inflation rate was traced mainly to slower price increases of some food items particularly corn, meat, and vegetables. On the other hand, inflation rates of most non-food commodities rose in August including housing, water, electricity, gas, and other fuels which turned positive after declining for 20 consecutive months since December 2014.
Governor Amando M. Tetangco, Jr. noted that latest inflation reading was consistent with the BSP’s assessment that inflation remains manageable and will approach a target-consistent path over the policy horizon. Going forward, the BSP will continue to monitor external developments and emerging price conditions to ensure that the monetary policy stance remains in line with price and financial stability.