Inflation in July accelerated further to 6.4 percent due to higher transport costs and select food prices, among others, the state statistics bureau said Friday.
July’s inflation was higher than June’s 6.1 percent but within the top band of the Bangko Sentral ng Pilipinas’ forecast of 5.6 to 6.4 percent, according to data released by the Philippine Statistics Authority.
“Ang dahilan ng mas mataas na inflation ngayong Hulyo 2022 ay ang mabilis na pagtaas ng presyo ng food and non alcoholic beverages,” National Statistician Dennis Mapa said in a briefing.
(The reason for the rise in inflation in July is the faster increase in prices of food and non-alcoholic beverages)
“Ang pangalawang commodity group na nagpakita ng mas mataas na inflation ay ang transport…ang pangatlong commodity group ay restaurant and accommodation services,” he added.
(Followed by the second commodity group that showed faster increase in inflation which is transport, the third os restaurant and accommodation services)
Food and beverage registered 6.9 percent inflation and a 64 percent share in the overall headline inflation, Mapa said. Transport posted 18.1 inflation while restaurant and accommodation services had 3.4 percent inflation, he added.
From January to July, the average inflation is at 4.7 percent, above the government target of 2 to 4 percent.
Inflation could remain elevated for the rest of the year due to price pressures from global uncertainties such as the Ukraine war, the slowdown in China, disruptions in the global supply chain, and the US Federal Reserve’s aggressive tightening of policy rates, the BSP earlier said.
Some analysts said inflation could even breach the 7 percent mark in the second half of the year.
The BSP has so far hiked its benchmark rate by 125-basis points to tame inflation. The off-cycle adjustment in July brought the key policy rate to 3.25 percent.
BSP Governor Felipe Medalla has said another 50 or 75 bps hike is possible in the Monetary Board’s Aug. 18 meeting.
Meanwhile, both Medalla and Finance Secretary Benjamin Diokno said the economy is robust enough to absorb the impact of the recent interest rate hikes.
BPI lead economist Jun Neri earlier said the economy has grown at an average of 6 percent for 10 years prior to the pandemic even though the average interest rate was close to 4 percent.
