Inflation accelerates to 3.1% in August

Inflation accelerated to 3.1 percent in August, the fastest since April, mainly due to the higher prices of food and non-alcoholic beverages, the Philippine Statistics Authority (PSA) revealed Tuesday.

This compares with 2.8 percent in July 2017 and 3.4 percent in April this year and 1.8 percent in August 2016.

"This was mainly due to the 3.5-percent growth of the heavily-weighted food and non-alcoholic beverage index," the PSA said.

Increases were also seen in the commodity groups Alcoholic beverages and tobacco, utilities, transport, communication, recreation, and miscellaneous goods.

Economists noted the inflation rate last month was within expectations.

The Bangko Sentral ng Pilipinas (BSP) pegged the August inflation to a range of 2.6 percent to 3.4 percent.

"It was expected. The weakening of the peso and price increases in petrol products, as well as basic commodities, made it likely that prices will increase," Cid L. Terosa, dean of the School of Economics of the University of Asia and the Pacific (UA&P), said.

The Manila Electric Co. (Meralco) imposed a P0.1338 per-kilowatt-hour increase in electricity rates last month, equivalent to a P27 increase in monthly bill of a typical household.

"The upward pressure on prices will continue, given the "ber" months and seemingly sustained level of the peso-dollar rate," Terosa said.

Independent economic consultant John Paolo Rivera also noted the seasonal trends during the last four months of the year.

"This might fluctuate in the -ber months as consumer demand increases due to the holiday season," he said.

"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 separate statement.

"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," he added. — VDS, GMA News