Inflation hits another fresh high of 5.7% in July 2018

MANILA, Philippines (UPDATED) – Inflation jumped to 5.7% in July, the Philippine Statistics Authority (PSA) said on Tuesday, August 7.

The latest figure was higher than the 5.2% registered in June.

The PSA said the uptrend was mainly due to food and non-alcoholic beverages which registered a 7.1% annual rate.

Spikes were also observed in alcoholic beverages and tobacco (21.5%); housing, water, electricity, gas and other fuels (5.6%); transportation (7.9%); and health (3.7%).

Meanwhile, education registered a negative figure at -3.9%.

Rice imports also failed to make an impact, as prices rose to 5%, 0.3 percentage points higher than in June.

Meat (5.8%); fish (11.4%); vegetables (16%); and sugar, jam, and other confectioneries (7.4%) also registered significant increases. (READ: Duterte admin gets lowest ratings on inflation, West PH Sea)

Regional inflation

In the National Capital Region (NCR), inflation surged to 6.5% from the previous 5.8%.

The most significant jumps were in food and non-alcoholic beverages (7.2%); alcoholic beverages and tobacco (21.9%); housing expenses and utilities (8.2%); and transportation (8.9%).

Areas outside NCR followed the trend and registered a 5.5% jump, higher than the 5.1% in June.

"Faster annual markups were recorded in all the commodity groups, except for the indices of recreation and culture, and education," the PSA said.

"The highest inflation of 7.5% was still noted in [the] Autonomous Region in Muslim Mindanao, while the lowest rate of 2.7% remained in Region III (Central Luzon)," the PSA added.

The poorest Filipinos felt the harsh impact of inflation during the 2nd quarter of 2018. The PSA previously said the country's year-on-year inflation for the bottom 30% income households went up by 6.5% in the 2nd quarter. (READ: Who's to blame for soaring inflation? 'All of them' in gov't, says economist)

Likely to miss target

The government is aiming to keep inflation within 2% to 4% from 2018 to 2022. 

However, the government is likely to miss the target. The Development Budget Coordination Committee projected 2018 average inflation to fall between 4% and 4.5%.

Economic managers anticipate inflation to taper off in 2019.

The Bangko Sentral ng Pilipinas Monetary Board will hold a meeting on Thursday, August 9, to discuss another possible round of interest rate hikes to address inflation. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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