4-8-2023 (MANILA) The Philippine Statistics Authority (PSA) has announced that the country’s inflation rate eased to 4.7 percent in July, the lowest rate since March 2022. This marks the sixth consecutive month of inflation slowdown since January. The main drivers that contributed to the decrease in inflation were housing, water, electricity, gas, and other fuels, food and non-alcoholic beverages, and transport, which decelerated to -4.7 percent from -3.1 percent in the previous month.
Inflation in the Philippines has been a major concern for policymakers, with the government setting a target range of 5 to 6 percent for 2023. The average inflation rate for the first seven months of the year is at 6.8 percent, higher than the target range.
PSA head Dennis Mapa noted that the core inflation, which excludes selected food and energy items in the headline inflation, also slowed to 6.7 percent in July. While the reduction in inflation is a welcome development, Mapa also emphasized the need for vigilance, especially as the country faces increasingly volatile weather disturbances and external headwinds such as oil prices and trade restrictions on food.
National Economic and Development Authority Secretary Arsenio Balisacan echoed Mapa’s sentiment, stating the need for continued preparedness in the face of upcoming typhoons and weather disturbances from El Nino. The government has taken steps to deploy its resources to affected areas and prepare its policy and on-the-ground response.
The Manila-based Asian Development Bank forecasts that inflation in the Philippines will average 6.2 percent in 2023 before easing to 4 percent in 2024. Despite the inflationary pressures, the government remains committed to its economic growth targets and aims to continue implementing policies that promote sustained and inclusive growth.
