Inflation eases to 2.4% in August

Inflation or the rate of increase of prices of goods and services slowed down in August due to downward pressure from major food commodities, the Philippine Statistics Authority (PSA) reported Friday.

In a virtual press conference, National Statistician Claire Dennis Mapa said that August inflation clocked in at 2.4%, slower than the 2.7% rate recorded in July.

Last month's inflation was faster than the 1.7% in August 2019. Year-to-date, inflation stood at 2.5%.

“Ang pangunahing dahilan ng pagbaba ng antas ng inflation sa buwan ng Agosto 2020 ay ang mas mabagal na paggalaw ng presyo ng Food and Non-Alcoholic Beverages,” Mapa said.

The PSA chief said that Food and Non-Alcoholic Beverages’ annual rate slowed to 1.8% from 2.4% in July.

By specific food item, the indices for Rice and Corn dropped to -1.1% and -0.6%, respectively.

Likewise, the index for Vegetables stood at -0.9% during the month, from a 0.9% annual hike in July.

Oils and Fats was higher at 2.4%, while the annual rate for Sugar, Jam, Honey, Chocolate and Confectionery inched up to 0.1%.

The indices of the following commodity groups also posted lower inflation during the month:

• Alcoholic beverages and tobacco at 17.7%
• Clothing and footwear at 1.9%
• Furnishing, household equipment and routine maintenance of the house at 3.9%
• Education at 0.1%
• Restaurant and miscellaneous goods and services at 2.3%

In a text message to reporters, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said that the August inflation of 2.4 % is lower than the central bank's assessment of 2.5% to 3.3% range.

Nevertheless, Diokno said last month’s inflation print is “consistent with the expectation that inflation will remain benign over the policy horizon.”

“The balance of risks tilts toward the downside owing largely to potential disruptions to domestic and global economic activity of the ongoing pandemic,” the BSP chief said.

Also contributing to the deceleration of August inflation was Recreation and Culture, which posted a -0.1% rate during the period, from an annual gain of 1.1% in July.

Inflation for Housing, Water, Electricity, Gas, and Other Fuels slightly went up to 0.9%, from 0.8% in the previous month.

Meanwhile, Health, Transport, and Communication retained their previous month’s rates of 2.8%, 6.3%, and 0.3%, respectively.

NCR inflation

Mapa reported that inflation in the National Capital Regions stood at 2.2% in August, the same rate recorded in July.

This, however, was faster than the 1.4% rate posted in August 2019.

The PSA chief noted that mixed movements in the annual growths were observed among the commodity groups in NCR.

He said that annual increase in the Transport index was higher at 11.9% during the month.

On the other hand, slowdowns in the annual increments were seen in the indices of the following commodity groups:

• Food and Non-alcoholic Beverages at 1.8%
• Alcoholic Beverages and Tobacco at 13.3%
• Health at 3.0%
• Education at 0.2%
• Restaurant and Miscellaneous Goods and Services at 1.7%

The index of housing, water, electricity, gas and other fuels eased at an annual rate of -0.2 percent during the month. Inflation for the rest of the commodity groups remained at their previous month’s rates

Areas outside NCR

“Ang inflation sa mga lugar sa labas ng National Capital Region ay bumaba sa antas na 2.5% nitong Agosto 2020. Noong Hulyo 2020, ang inflation ay naitala sa 2.9%,” Mapa said.

Relative to their annual growth rates in July, the PSA chief said 12 regions in areas outside NCR exhibited lower inflation during the month with Region XI or Davao Region registering the lowest inflation at 0.2%.

On the other hand, the highest inflation remained in Region V or Bicol Region at 4.0%.   —KBK, GMA News