Headline inflation rose to 3.1 percent year-on-year in August from 2.8 percent in July in line with BSP staff forecast. The resulting year-to-date average inflation rate of 3.1 percent remains within the Government’s target range of 3.0 percent ± 1.0 percentage point for 2017. Similarly, core inflation—which excludes certain volatile food and energy items to measure underlying price pressures—rose to 3.0 percent in August from 2.8 percent (revised) in the previous month. However, on a month-on-month seasonally-adjusted basis, headline inflation eased to 0.2 percent in August from 0.3 percent in the previous month.
The slightly higher August headline inflation was driven mainly by higher prices of non-food commodities, particularly upward adjustments in electricity rates due to the increase in generation and transmission charges, higher prices of domestic petroleum products, and increase in air passenger and sea fares. At the same time, food inflation went up as prices of fish, corn, and vegetables increased due to some tightness in domestic supply caused by adverse weather conditions during the month.
Governor Nestor A. Espenilla, Jr. stated that the latest inflation readings continue to support the BSP’s assessment of a manageable inflation outlook. The overall inflation situation will be comprehensively reviewed by the Monetary Board on 21 September 2017 in accordance with the regular policy review schedule.
Source: Bangko Sentral ng Pilipinas (BSP)