MANILA—August's headline inflation rate in the Philippines is likely to have settled within the government's target range of 2 to 4 percent, following a higher rate in July, according to a leading economist.

According to Philippines News Agency, via a Viber message, the inflation likely decelerated to 3.8 percent last month from 4.4 percent in July. He attributed the expected easing to several factors, including the reduction of rice import tariffs from 35 percent to 15 percent and lower global prices for rice and other major commodities.

"There could still be spillover effects on inflation by Typhoon Carina and the recent habagat, but a price freeze is still in effect in areas where a state of calamity was declared up to 60 days or until September 24, 2024," Ricafort mentioned, highlighting ongoing government measures to stabilize prices. He also noted that a relatively stronger peso against the US dollar could help reduce import costs, contributing further to curbing inflation.

Looking ahead, Ricafort anticipates that headline inflation will likely remain within the Bangko Sentral ng Pilipinas' (BSP) target range for the remainder of the year. He suggested that this stabilization could justify further BSP rate cuts to align with potential future Federal Reserve rate adjustments from 2024 to 2026, aiming to maintain healthy interest rate differentials.

The Philippine Statistics Authority is set to release the official inflation data for August 2024 on Thursday.