The slight increase in core inflation last month indicates that consumers may see some modest uptick in commodity prices in the near term, an official of the Finance Department said Thursday.
Finance undersecretary Gil Beltran, appearing at the Thursday Club media forum in Quezon City, said removing the impact of volatile food and fuel prices, core inflation accelerated to its highest level this year at 2 percent in August.
Beltran said the country’s low inflation regime would serve as a favorable environment for policy makers to further cultivate and sustain sound economic policies.
“Outlook for the immediate near-term may see modest uptick in inflation, as indicated by the rise in core inflation from 1.9 percent to 2 percent,” Beltran said in a report submitted to Finance Secretary Carlos Dominguez III.
Headline inflation in August slowed to 1.8 percent from the previous month’s 1.9 percent, owing to the decline in prices of index heavyweights non-alcoholic beverages and food, particularly corn, meat, and vegetables.
July’s headline figure was below the internal forecast of 2 percent by the DOF and Bangko Sentral ng Pilipinas’ target range of 2 percent to 4.0 percent for the year.
“The lower-than-expected inflation rate is largely accounted for by the continued easing of food prices. While the DOF had expected food prices to rise by 2.7 percent, actual increase turned out to be 2.4 percent,” Beltran told members of Thursday Club.
The general price increase for food and non-alcoholic drinks further slowed to 2.4 percent in August from 2.7 percent in the previous month, contributing 1 percentage point to inflation. Recreation and culture also eased to 1.7 percent from 1.8 percent.
Meanwhile, prices of alcoholic drinks and tobacco rose 6 percent from 5.8 percent in July; health increase by 2.7 percent from 2.4 percent; housing, utilities and fuels jumped by 0.1 percent from negative 0.2 percent.