Inflation in August likely hit a fresh high in more than nine years of 5.9 percent year-on-year mainly due to higher food prices, although the month-on-month increment further slowed, the Department of Finance said Monday.
In an economic bulletin, Finance Undersecretary and chief economist Gil S. Beltran said the inflationary momentum was easing as prices of basic goods and services last month rose by only 0.38 percent compared with July prices.
The month-on-month inflation rise in July was a higher 0.51 percent.
“The driver of inflation is largely supply-side challenges, which need to be addressed by improving productivity,” Beltran said. “In particular, the QR [quantitative restriction] for rice, which accounts for 9.6 percent of the CPI [consumer price index] basket, is proposed to be tariffied.”
The government is working to remove the QR or import quota slapped on rice and instead slap a 35-percent tariff on imports of the Filipino staple to help bring down prices.
Based on Beltran’s computation, prices of food and alcoholic beverages grew 7.48 percent year-on-year in August, faster than the 7.03 percent in July. Inflation of food and nonalcoholic beverages in August last year was only 2.94 percent year-on-year.
But the month-on-month rise in prices of food and nonalcoholic beverages slowed to 0.68 percent from 0.9 percent in July.
Rice prices climbed 5.44 percent last month, faster than July’s 5-percent price increase.
Prices of vegetables jumped 17.87 percent in August, also faster than July’s 16.04 percent.
The increase in fish prices eased to 10.74 percent compared with 11.38 percent in July.
The August inflation report will be released on Wednesday.
Economists expect the inflation rate to peak in the third quarter before returning to within target range by next year.