Philippines: Inflation drops to lowest level since August 2009
September 5, 2013
In August, consumer prices edged up 0.22% over the previous month, which came in above the 0.15% rise observed in July. Higher prices for food and non-alcoholic beverages as well as for restaurants and miscellaneous goods and services were the most important drivers behind the monthly rise.
Annual inflation dropped from 2.5% in July to 2.1% in August, the lowest reading that has been recorded since August 2009. Meanwhile, annual average inflation, which is the reference rate used by the Central Bank as a guide for monetary policy, edged down from 3.1% in July to 2.9% in August. At the current level, average inflation remains within the Central Bank's target range of 4.0% plus/minus 1.0 percentage points.
The core inflation index, which excludes volatile items such as food and oil, was flat over the previous month and therefore in line with the July reading. Annual core inflation dropped from 2.3% in July to 1.9% in August.
The Central Bank expects average inflation to settle within the target range in both 2013 and 2014. FocusEconomics Consensus Forecast panelists expect annual inflation to average 3.4% in 2013, which is down 0.2 percentage points from last month's forecast. For 2014, the panel expects inflation to average 3.9%.
Author: Carl Kelly, Economist