go through Luisa Maria Jacinta C. Josen, Senior Reporter
Title Sharp Inflationly July slowed to a six-year low as utilities and food costs continued to ease. Philippine Statistics Bureau (PSA) display.
PSA reported Tuesday that the consumer price index rose 0.9% in July, slower than 1.4% in June and 4.4% a year ago.
This is the lowest inflation rate in nearly six years, or since the 0.6% printing released in October 2019. This also marks the fifth consecutive month of inflation settled below the central bank’s target range of 2-4%.
July prints are in the Bangladesh Sentral Ng Pilipinas’ (BSP) forecast this month, but below the 1.2% median estimate in A BusinessWorld A poll of 17 analysts conducted last week.
Inflation was 1.7% in the first seven months of the year, 1.6% higher than BSP’s full-year forecast.
The core inflation rate, excluding volatile prices of food and fuel, was 2.2% in July, up to 2.3%. From January to July, core inflation averaged 2.3%.
Inflation in July exceeded its forecast, BSP said in a statement.
It added: “Inflation is expected to be below the lower end of the target at the 2025 average, mainly due to the continued decline in rice prices.”
National statistician Claire Dennis S. Marca (Claire Dennis S.
The index fell from 3.2% in June to 2.1% in July, accounting for 45.1% of the overall downward trend in inflation.
This is because electricity inflation fell from 7.4% a month ago to 1.3% in July, even as Manila Electric Corporation (Meralco) raises the rate to P0.4883 per kilowatt-hour In this month.
Liquefied petroleum gas (LPG) also released an inflation rate of 0.7%, slower than the 1.9% clip in June. In July, LPG providers Petron and Solane implemented a price rollback of P1 per kilogram.
Meanwhile, the weight-weighted food and non-alcoholic beverage index also fell to 0.2% from 0.4% in June.
Inflation in cereals and cereal products fell from 10.3% a month ago, and further reached 11.5% from July.
Rice price
Rice inflation continues to recoverSince 1995, the negative number has been negative, falling to a new all-time low of 15.9%.
“We may still see negative inflation in rice over the next four months. Even if we are at a price per kilogram, this is a price that is constantly falling.”
The average price of regular rice fell 18.2% from P50.90 a year ago to P41.31. Seed rice fell 14.8% year-on-year, from p55.85 to P47.60, while special rice dropped from P64.42 per kilogram to 11.8% to P56.83.
Since last year, the government has taken several measures to tame the prices of staple food grains, such as cutting tariffs on rice imports.
However, the Ministry of Agriculture recommended this week to tip Ferdinand R.
In July 2024, the spiral price cut the tariffs on rice from 35% to 15%. Small Farm Secretary Francisco P. Tiu Laurel (Jr.
Mr Mapa said the potential increase in tariffs could affect the development of rice inflation forward.
“It depends on time … When tariffs increase, retail prices will increase.”
The decline in vegetables, tubers, plantains, cooking bananas and beans fell to 4.7% from June.
Despite the recent weather barriers causing agricultural damage, Mr Mapa said vegetable inflation continues to ease.
“But the rise of certain vegetable items we’re seeing in the capital region of the country, especially in the second half of July, such as leafy greens… We hope this month’s August may adjust our vegetable prices to a higher adjustment, which may have an impact on our inflation rate.”
Meanwhile, the contraction of transportation inflation fell by 1.6% in July to 2% in June. This is a rapid drop in passenger transport at sea to 5.2% Last month it was 24.8%.
Gasoline inflation fell to 10% from a contraction of 8.9% a month ago.
In July, the price adjustment for gasoline was net decrease by 1.10 liters of p1.10, while the price of kerosene was adjusted to 1.10 liters. On the other hand, the net increase of diesel to P1.20.
Inflation in the National Capital Region (NCR) also fell to 1.7% in July from 2.6% in June.
Outside the NCR, inflation slowed to 0.7% in July from 1.1% in June.
Inflation among the lowest-income households fell to 0.8% from 0.4% in June. At the end of the year, the inflation rate for the lowest 30% of income households is 0.5%.
prospect
The central bank said title inflation could settle within the target band of 2-4% from this year to 2027.
“Inflation is expected to trend higher in 2026 and 2027, but will firmly stabilize within the target range of 2-4%,” it said.
“Global economic activity shows signs of slowing down, affected by uncertainty in U.S. trade policy and ongoing geopolitical conflicts in the Middle East. These developments could lead to a slowdown in domestic growth.”
BSP expects inflation to be 3.4% in 2026 and 3.3% in 2027.
Arsenio M. Balisacan, secretary of the Ministry of Economics, Planning and Development (DEPDEV), said overall inflation this year will “still be beneficial and support domestic demand.”
“The continued decline in rice prices and lower inflation in low-income households suggest that our intervention is working,” he said in a statement.
“This not only helps Filipinos maintain the value of peso, but also provides confidence for businesses and consumers.”
DePdev also cites data from the Philippine Atmospheric, Geophysical and Astronomical Services Authority, which shows a “relatively favorable climate prospect” from this month to January 2026.
“Nine to 17 tropical cyclones are expected, but neutral ENSO (Southern El Niño Oscillation) neutral conditions may support stable agricultural production.”
However, Mr Balisacan pointed out that it is necessary to “stay alert, including external risks, including global policy shifts and geopolitical tensions”.
BSP said that as inflation is expected to be fully controlled, “guarantee a more accessible monetary policy stance.”
“With the impact of previous monetary policy adjustments continuing to be assessed, emerging risks from geopolitical tensions and external policy uncertainty will require closer monitoring,” it said.
Analysts expect inflation to remain within target range for the remainder of the year.
“Although we can still see an upward trend in inflation due to the basic impact, we still expect monthly inflation prints to remain below the BSP’s 2-4% target for the rest of the year,” Chinabank Research said in a comment.
It added that rice inflation remains negative due to the basic impact and the continued decline in monthly rice prices.
Bank of Philippine Islands lead economist Emilio S. Neri, Jr. “However, the favorable basic impact could disappear by September, with inflation approaching 3%.”
Chinabank said risks to rising space include adverse weather and proposals to raise tariff rates and limit rice imports.
“Severe storms affecting agricultural output may lead to faster inflation. Global oil prices may remain stable due to the expected increase in oil supply, but any new conflict in the Middle East could trigger a spike.”
Cut fees
However, inflation is good Analysts say that below the target bands of 2-4%, central banks have plenty of room to offer more tax cuts.
“This benign inflation prospect is well suited to domestic consumption activities, and it supports the case of BSP’s further currencies reduction,” Chinabank said.
Mr Neri said BSP’s regulation of inflation and dirty signals were “very likely” to decrease in August.
Chinabank expects the Monetary Commission meeting to drop another $2.5 billion later this month, and it has been reduced in the fourth quarter.
“On Thursday, the shortcomings of GDP could consolidate the case.”
PSA is scheduled to release its second quarter GDP on Thursday, August 7.
Philippines’ economy may grow 5.5% in the second quarter, according to the median of 17 polls BusinessWorld. If achieved, this would be slower than the 6.5% expansion a year ago.
“The Fed’s slowdown in September may pave the way for BSP in another cut in October,” Neri said.
The next meeting of the Federal Open Market Committee is scheduled to take place from September 16 to 17.
“Nevertheless, uncertainty continues to cast a shadow on the outlook for U.S. monetary policy. Tariffs may not have been fully passed to U.S. consumers, and U.S. inflation charges could delay easing the Fed.”
Mr Neri added: “In this case, rooms that need to cut BSP tax rates may shrink. So it’s still worth it to be cautious, and it’s too early to fully price in October’s BSP tax rate reduction.”
