MANILA – The country’s inflation rate surged to 3.1 percent in August 2017 from 2.8 percent in the previous month, due to higher prices of food, transport, water and electricity.
A report from Philippine Statistics Authority (PSA), an attached agency of the National Economic and Development Authority (NEDA), showed that core inflation, which excludes select volatile food and energy prices, also rose to 3 percent in August, higher than the revised 2.8 percent in July.
This is slightly higher than market expectations of 3 percent, but still within government’s target of 2 to 4 percent.
Earlier, a BusinessWorld poll among 13 economists yielded a median inflation estimate of 3.0% for August – an estimate that falls at the middle of the 2.6-3.4% range given by the Bangko Sentral ng Pilipinas (BSP) Department of Economic Research last week.
“Inflation is still expected to remain well within government’s target for the year despite accelerating for the second time in a row. Nonetheless, we should continue to closely monitor upside and downside risks,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
Food inflation rose to 3.7 percent in August 2017 from 3.4 percent in July 2017 due to faster price increases in vegetables, fish, corn, flour, bread and other cereals.
Pernia, also NEDA Director-General, attributed higher food prices to typhoon Jolina last month, which affected agriculture in Central Luzon, particularly in Aurora.
Meanwhile, the PSA said non-food inflation rose to 2.7 percent from 2.4 percent in July, driven by faster price adjustments in transport, housing, recreation and culture, communication, restaurants, water, and electricity and gas.
“The continuing surge in domestic petrol prices, coupled with depreciation in the peso-dollar rate, may exert upward pressures on inflation, leading to increases in the cost of electricity, gas, and other fuels in the near term,” Pernia said.
The NEDA chief noted that the impact of hurricane Harvey on United States (US) oil production could exert upward pressures on world oil prices and could translate to higher domestic prices of petroleum.
“Any significant increases in domestic oil prices could push up transport and electricity inflation in the country in the near term,” Pernia said, adding that he is optimistic this could still be offset by higher domestic productivity in agriculture and stable commodity prices.