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📉 MANILA – Headline inflation in the Philippines reached a 16-month low in July, registering at 4.7 percent, down from 5.4 percent in June, as reported by the Philippine Statistics Authority (PSA) on Friday.

During a briefing, National Statistician Dennis Mapa revealed that last month’s headline inflation was lower compared to 6.8 percent in the same period last year, marking the lowest rate since March 2022, which was recorded at 4 percent.

Meanwhile, core inflation, excluding volatile oil and food items, declined to 6.7 percent from 7.4 percent in June.

According to Mapa, the continued downward trend of overall inflation was primarily attributed to the slower year-on-year increase in housing, water, electricity, gas, and other fuels at 4.5 percent, down from 5.6 percent in June, due to reduced price hikes in electricity, house rentals, and liquefied petroleum gas (LPG).

“The slower annual increment observed in heavily-weighted food and non-alcoholic beverages at 6.3 percent in July 2023 from 6.7 percent in the previous month also contributed to the downward trend of headline inflation,” Mapa said.

Transportation was another significant source of deceleration, showing a faster annual decrease of -4.7 percent from -3.1 percent in June.

Year-to-date, headline inflation settled at 6.8 percent, while core inflation was at 7.6 percent.

Inflation in the National Capital Region (NCR) remained at 5.6 percent, while areas outside the NCR experienced a deceleration to 4.4 percent from 5.3 percent in June.

For the bottom 30 percent of households, inflation also fell to 5.2 percent from 6.1 percent in the previous month.

In a Viber message to reporters, Department of Finance Secretary Benjamin Diokno expressed optimism that inflation might settle within the government’s target range by the end of this year.

“This (is) the sixth consecutive month that inflation has eased, strongly supporting the likelihood that inflation might be within the 2 to 4 percent target range by the fourth quarter of 2023,” Diokno said.

However, National Economic and Development Authority Secretary Arsenio Balisacan urged vigilance despite the downward trend. He highlighted the government’s proactive monitoring of supply and demand for key commodities to achieve the 2 percent to 4 percent inflation target by year-end.

“While we continue to experience a downtrend in inflation, we need to be vigilant, especially as we face increasingly volatile weather disturbances, as well as external headwinds, such as oil price increases and trade restrictions on food,” Balisacan stated in a separate statement.

To ensure that weather disturbances do not have a lasting impact on inflation and the economy, the government is actively deploying resources to affected areas and preparing policy responses to anticipate more typhoons and weather disturbances from El Niño.

“The government will implement necessary measures to prevent price spikes, protect the purchasing power of Filipino families, and sustain our economic recovery and momentum,” Balisacan affirmed.

He also mentioned that the Inter-Agency Committee on Inflation and Market Outlook and the Economic Development Group held a joint meeting on July 20 to discuss proposed policy adjustments to ensure a stable supply of agricultural products to adequately meet the demand of various users and end-consumers.

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