Inflation hits fastest pace in July

Inflation rose to 3.2 percent in July, the fastest since January, as bigger price increases were reported in several commodity groups, documents from the National Statistics Office (NSO) showed.

The rate of increase in consumer prices came in at 4 percent in January, dropped to 2.7 percent in February then eased further to 2.6 percent in March. It picked up to 3.0 percent in April and went down again to 2.9 percent in May and 2.8 percent in June.

The July inflation figure was lower than the 4.9 percent registered during the same month last year and brought the average year-to-date inflation to 3.1 percent, well within the government’s 3 to 5 percent for the whole of 2012.

Annual inflation in areas outside Metro Manila also accelerated to 3.2 percent in July from 3 percent in June, the NSO said.

Meanwhile, inflation in the National Capital Region (NRC) jumped to 3.1 percent in July from 2.2 percent the previous month due to higher annual increases in all commodity groups except clothing and footwear, health, transport, communication, and education.

Excluding selected food and energy items, core inflation for the whole country increased to 4.1 percent in July from 3.7 percent in June. Month-on-month inflation decelerated to 0.3 percent in July from 0.5 percent in June, the NSO said.

“Price increases were observed in food items like rice, meat, fish, vegetables and sugar. However, this was tempered by the downward price adjustments in cooking oil, selected condiments and seasonings, gasoline and diesel,” the NSO said.

Cid Terosa of the University of Asia and the Pacific said he expected inflation to continue accelerating in the coming months.

“Rising food and oil prices will exert upward pressure on inflation. As long as the increase is within the 3- to 5-percent range, I believe inflation won’t cut growth as much,” Terosa said.