MANILA, Philippines – Inflation, the movement of prices of basic goods and services, continued its upward trend as it rose to 3.1% in August from 2.8% in July.
The National Economic and Development Authority (NEDA) attributed the increase in August to higher prices of food, transportation, water, electricity, and gas.
Core inflation, which excludes select volatile food and energy prices, also rose to 3.0% in August, higher than the revised 2.8% in July.
While the August figure is slightly higher than market expectations of 3.0%, it still remains within the government’s target of 2% to 4%.
“Inflation is still expected to remain well within government’s target for the year despite accelerating for the second time in a row. Nonetheless, we should continue to closely monitor upside and downside risks,” Socioeconomic Planning Secretary Ernesto Pernia said in a statement on Tuesday, September 5.
Food inflation rose to 3.7% in August from 3.4% in July due to faster price increases in vegetables, fish, corn, flour, bread, and other cereals.
Non-food inflation, on the other hand, rose to 2.7% from 2.4%. NEDA attributed this to price adjustments in transportation, housing, recreation and culture, communication, restaurants, water, and electricity and gas.
“The continuing surge in domestic petrol prices, coupled with depreciation in the peso-dollar rate, may exert upward pressures on inflation, leading to increases in the cost of electricity, gas, and other fuels in the near term,” Pernia said.
The socioeconomic planning secretary also warned that the economic impact of Hurricane Harvey in the United States could dampen the energy supply and push world oil prices up, leading to higher local prices.
But Pernia maintained that this could still be offset by higher domestic productivity in agriculture and stable commodity prices with favorable weather conditions. – Rappler.com