DOF sees July inflation at 2.7%

Inflation likely eased to 2.7 percent in July on the back of steady food prices as well as power rates, the Department of Finance said Monday.

In a report to Finance Secretary Carlos G. Dominguez III, DOF chief economist and Undersecretary Gil S. Beltran said “the increase in consumer prices likely moderated after the rate of index heavyweights food and non-alcoholic beverages remained steady last month.”

For Beltran, headline inflation rose 2.7 percent year-on-year in July, slightly slower than June’s 2.8 percent but faster than the 1.9 percent posted a year ago.

At 2.7 percent, it would be similar to the rate in January and the lowest in six months.

The government will release the July inflation figure on Friday.

According to the DOF’s estimates, “prices of food and non-alcoholic beverages clocked at 3.5 percent last month, matching the rate logged in June, but higher compared to 2.7 percent registered in the same month in 2016.”

“Power costs likewise dropped during the month compared to the previous year. In the first four weeks of July, Manila Electric Company’s rate per kilowatt hour (kWh) for an average of 200 kilowatts-per-month consumption declined to P8.25 from P8.61 a year ago, but higher than P8.18 in June. However, Meralco’s generation charge per kilowatt jumped to P3.94 last month from P3.86 in June, but the latest figure is cheaper than the P4.06 price saw in the same month last year,” the DOF added.

“Continuing benign inflation will enable the economy to sustain rapid economic growth and hurdle volatilities in the world economy with relative ease,” Beltran said.

Inflation averaged 3.1 percent in the first half, at the midpoint of the government’s 2-4 percent target range for 2017. JE