Metro Manila (CNN Philippines) — For a third consecutive month, headline inflation has dropped to its lowest level in 20 years, according to figures from the Philippine Statistics Authority (PSA).
The PSA reported on Wednesday (August 5) that the rate dropped further to 0.8% in July, from the previous month’s 1.2% and July 2014’s 4.9%.
According to the Bangko Sentral ng Pilipinas, July’s figure subsequently brings year-to-date inflation to 1.9%, slightly below the government’s 2.0%-4.0% target range for 2015.
The National Economic and Development Authority attributed the drop to slower price adjustments in food, energy, and oil.
NEDA said that headline inflation in food eased to 1.3%, following moderate price pressures in bread and cereals, fish, vegetables, and fruits.
“In part, the increase in total rice stocks inventory, which grew by 30.9 percent year-on-year as of June 2015, supported the normalization of rice prices from double-digit annual growths recorded in 2014,” remarked NEDA chief Arsenio Balisacan in a statement.
“Stable bread prices also benefited from the low global wheat prices while meat prices remained stable.”
Similarly, core inflation decelerated to 1.9%, from 2.0% the previous month and 3.0% in July 2014. The metric excludes selected food and energy prices because of their volatility. The rate’s year-to-date figure stands at 2.3%.
“The easing of the core inflation is favorable for household consumption and supports economic expansion moving forward, as it provides less pressure for interest rates to increase,” Balisacan explained.
Despite the slower increase of prices, the NEDA chief said that inflation might pick up due to risks from the occurrence of typhoons in the second half of the year, which may also intensify because of the El Niño weather phenomenon.
“Continued monitoring of agricultural areas is important to ensure that appropriate policy actions are implemented without delay,” said Balisacan.
