Philippines: Inflation rises to nine-month high in July
Inflation increased to 4.4% in July, above June’s 3.7%. July’s figure marked the highest inflation rate since October 2023 and exceeded the Central Bank’s 2.0–4.0% target range. The acceleration stemmed from sharper rises in price pressures for food, housing and utilities, and transportation.
That said, annual average inflation remained at June’s 4.2% in July.
Finally, consumer prices rose a seasonally adjusted 0.57% in July over the previous month, accelerating from June’s 0.03% rise. July’s figure was the sharpest increase in prices since February.
Nomura analysts Euben Paracuelles and Nabila Amani commented on the outlook for inflation and monetary policy:
“We maintain our forecast that full-year 2024 CPI inflation will average 2.8%, falling sharply from 6% in 2023 and within Bangko Sentral Pilipinas (BSP)’s 2-4% target, because of the cut in import tariffs for rice. […] In terms of monetary policy, the July CPI outturn does not change our latest view that BSP’s rate-cutting cycle could begin in August given its pickup is likely to have been temporary. […] BSP also retained in its post-CPI statement that headline inflation will start easing in August and assessed that the balance of risks to the inflation outlook has ‘shifted to the downside’.”