Inflation quickens to 2.7 percent in July

MANILA, Philippines — The country’s headline inflation “continued to exhibit a faster pace” as it picked up to 2.7 percent in July, the Philippine Statistics Authority (PSA) said Wednesday.

This brings the year-to-date inflation for 2020 at 2.5 percent, according to PSA.

The month of June posted an inflation rate of 2.5 percent. On the other hand, July 2019’s rate was at 2.4 percent.

“The acceleration in the overall inflation was mainly caused by the jump in the inflation of the transport index at 6.3 percent during the month, from 2.4 percent in June 2020,” PSA said in its report.

Annual increments were also higher in the indices of the following commodity groups: alcoholic beverages and tobacco at 19.3 percent; housing, water, electricity, gas, and other fuels at 0.8 percent; and restaurant and miscellaneous goods and services at 2.5 percent.

Core inflation, which strips out volatile food and fuel items, went up to 3.3 percent in July from the 2 percent in June and 3.2 percent in July in 2019.

“Except for the health index whose annual rate remained at 2.8 percent, the six remaining commodity groups exhibited slower annual increases during the month,” added PSA.

Inflation for the food index at the national level continued to decelerate at 2.5 percent in July 2020, compared to the 2.7 percent in June this year.

In July 2019, food inflation was marked at 1.7 percent.

PSA said inflation in Metro Manila was also higher at 2.2 percent in July 2020 compared to the 2.0 percent in June. The annual rate in the region was 2.3 percent in July last year.

Inflation in areas outside Metro Manila likewise increased at 2.9 percent in July. Inflation in these areas was at 2.7 percent in June this year, and 2.4 percent in July last year.

Meanwhile, the PSA also revised the first quarter 2020 gross domestic product rate from the initially reported -0.2 percent to -0.7 percent.

“The growth rates of Net Primary Income from the rest of the world, and Gross National Income recorded downward revisions from -4.4 percent to -5.9 percent, and from -0.6 percent to -1.2 percent, respectively,” PSA explained.

The PSA said it revises the GDP estimates based on an approved revision policy, the PSA Board Resolution No.1, Series of 2017-053, which is consistent with international standard practices on national accounts revisions.

EDV