Philippines Inflation August 2019


Philippines: Inflation falls below Central Bank target range in August

September 5, 2019

Consumer prices rose 0.17% over the prior month in August, down from the 0.25% increase in July. Food and non-alcoholic beverages; alcoholic beverages and tobacco; and education logged higher prices in August. On the other hand, transport, and housing and utilities costs fell in the month.

Inflation decelerated sharply to an over near three-year low of 1.7% in August from 2.4% in July, thus falling below the lower limit of the Central Bank’s target band of 2.0%–4.0%. Core inflation, which excludes volatile food and energy prices, edged down to an over one-and-a-half-year low of 2.9% in August from 3.2% in July, while annual average inflation eased to 4.1% from 4.5%.

Sustained deflationary pressures in the third quarter strengthens the case for another rate cut by the BSP at its 26 September meeting. Commenting on ING’s scenario, economist Nicholas Mapa, noted:

“A few weeks back, BSP Governor Diokno pledged to cut policy rates by another 25 bps before the end of the year.  With inflation careening below the BSP’s own target, we expect the Governor to deliver on his pledge and cut policy rates by an additional 25 bps at the 26 September meeting.”  

FocusEconomics Consensus Forecast panelists expect inflation to average 2.9% in 2019, which is down 0.1 percentage points from last month’s projection. For 2020, panelists see average inflation of 3.3%.

Author:, Economist

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Philippines Inflation Chart

Philippines Inflation August 2019

Note: Annual and monthly variation of consumer price index in %.
Source: Central Bank of the Philippines (BSP) and FocusEconomics calculations.

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