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MANILA - (UPDATED 3:14 p.m.) Inflation hit a 6-month high in July on the back of faster price increases of all consumer items except clothing and footwear, health, transport, and education.
In a report, the National Statistics Office said inflation last month picked up to 3.2 percent from June's 2.8 percent uptick. The July reading was the highest since the 4 percent in January, and was within the Bangko Sentral ng Pilipinas forecast of 2.6-3.5 percent for last month.
Excluding the volatile food and energy items, core inflation likewise rose to 4.1 percent last month from 3.7 percent in June.
According to the BSP, the higher inflation last month stemmed from increases in the prices of petroleum products and electricity, as well as marginal gains in the prices of cereals and bread.
"Owing to the onset of the rainy season, fruits and vegetables posted higher prices, which also contributed to higher food inflation," BSP Governor Amando M. Tetangco Jr. said in a statement.
Despite the uptick in July, the seven-month average of 3.1 percent was still at the low-end of the BSP's full-year target range of up to 5 percent.
Tetangco said the latest inflation reading was "consistent with the BSP's assessment of a manageable inflation environment over the policy horizon, with average inflation likely to remain well within the 3-5 percent target range."
"The BSP will continue to keep a close watch on the evolving balance of risks to inflation to ensure that monetary policy remains supportive of sustained non-inflationary economic growth," he said.
The BSP last month cut its policy rates by 25 basis points, bringing its overnight borrowing and lending rates to new record lows of 3.75 and 5.75 percent, respectively.
DBS earlier said the Philippine central bank is likely to cut further its policy rates by another 25 basis points given a benign inflation outlook and weak external demand.
With a report from Joseph Villanueva
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