Philippines Inflation


Philippines: Weather-related supply disruptions drive inflation to nearly three-year high

August 5, 2014

In July, consumer prices rose 0.6% over the previous month, which exceeded the 0.4% rise recorded in June. July’s increase was driven by higher food prices that resulted from tight domestic supply conditions caused by weather-related production interruptions. As a result of the higher monthly figure, annual inflation rose from 4.4% in June to 4.9% in July, which represented the highest reading since October 2011. Meanwhile, annual average inflation, which is the reference rate used by the Central Bank as a guide for monetary policy, edged up from 3.6% in June to 3.8% in July.

The core inflation index, which excludes volatile items such as food and oil, increased 0.2% over the previous month in July, mirroring June’s figure. Finally, annual core inflation rose from 2.8% in June to 3.0% in July.

The Central Bank’s target inflation rate is 4.0% plus/minus 1.0 percentage point for this year. For 2015, the inflation target is 3.0% plus/minus 1.0 percentage point. FocusEconomics Consensus Forecast panelists expect annual inflation to average 4.2% in 2014, which is up 0.2 percentage points from last month’s forecast. For 2015, the panel expects inflation to average 3.9%.

Author: Teresa Kersting, Economist

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Philippines Inflation Chart

Philippines Inflation July 2014

Note: Annual and monthly variation of consumer price index in %.
Source: National Statistics Office (NSO).

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