The increase in headline inflation was driven mainly by higher price increases of key food items, particularly vegetables and fish.
AUGUST headline inflation (price of consumer goods in the basket) rose to 4.9 percent year-on-year in August from 4 percent in July.
The resulting year-to-date average inflation rate of 4.4 percent was above the Government’s annual inflation target of 3.0 percent ± 1.0 percentage point for the year.
Similarly, core inflation (which is less volatile than headline inflation as it excludes food and energy items to depict underlying demand-side price pressures), also increased to 3.3 percent year-on-year in August from 2.9 percent in July.
On a month-on-month seasonally adjusted basis, inflation rose to 0.6 percent in August from 0.4 percent in the previous month.
High food prices
The increase in headline inflation was driven mainly by higher price increases of key food items, particularly vegetables and fish.
Vegetable inflation rose in August due to supply disruptions from damage caused by monsoon rains in parts of the country.
Adverse weather conditions also hampered fishing and port operations, which led to higher fish inflation.
Meanwhile, increased electricity rates due to higher generation and transmission charges along with increased prices of liquefied petroleum gas (LPG) contributed to the rise in year-on-year non-food inflation.
BSP assessment
The latest CPI outturn is consistent with the Bangko Sentral’s assessment that inflation could settle close to the high end of the target range in the near term before decelerating back to within the target by year end.
In 2022-2023, inflation is expected to decline towards the midpoint of the target, supported by the continued and timely implementation of non-monetary measures and reforms to address directly supply-side pressures on key food items.
Moving forward, the BSP will continue to monitor emerging price developments to help ensure that its primary mandate of price stability conducive to a balanced and sustainable economic growth is achieved.
Tags: #economy, #inflation, #consumergoods, #pricehikes, #BangkoSentralNgPilipinas