Philippines Inflation July 2019


Philippines: Inflation slows to two-year low in July

August 6, 2019

Consumer prices rose 0.25% over the prior month in July, up from the 0.08% increase in June. Higher prices were seen across the board, with the exception of falling transport prices and education costs which eased but remained elevated overall in the month.

Inflation decelerated to a two-year low of 2.4% in July from 2.7% in June due largely to notably softer food and transport inflation, remaining comfortably within the Central Bank’s target band of 3.0% plus or minus 1.0 percentage point. Core inflation, which excludes volatile food and energy prices, ticked down to 3.2% in July from 3.3% in June, while annual average inflation eased to 4.5% from 4.8%.

Commenting on the implications of slowing inflation on the Central Bank’s monetary policy stance, analysts at DBS noted:

“Inflation is likely to remain on the back burner this year, providing space for more monetary easing. […] We think inflation will continue to ease (at least through October). Growth slowed significantly in 1Q19, due to tough external conditions and 2019 budget impasse. In addition, US-China continuous trade tension could prolong pressures to emerging markets, including the Philippines. We think BSP is likely to cut policy rate by 25bps on Thursday and another 25bps cut is likely later this year.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.0% in 2019, which is down 0.2 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 July 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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