Inflation likely slowed in July

MANILA, Philippines - Inflation likely eased in July due to stable food prices and lower electricity rates, the Department of Finance (DOF) said yesterday.

DOF Undersecretary and chief economist Gil Beltran said the inflation rate may have slightly dropped to 2.7 percent in July from 2.8 percent in June.

This was, however, up from the 1.9 percent inflation recorded in the same month in 2016.

“Inflation rate this month (July) is likely to moderate to 2.7 percent on the back of stable food prices. Year-on-year, power rates also declined,” Beltran said in his report to Finance Secretary Carlos Dominguez.

“Continuing benign inflation will enable the economy to sustain rapid economic growth and hurdle volatilities in the world economy with relative ease,” he said.

Beltran said the increase in consumer prices may have slowed down as prices of food and non-alcoholic beverages remained steady last month at 3.5 percent. However, this was also higher compared to the 2.7 percent registered in the same month last year.

The finance official also estimated that power costs may have decreased year-on-year.

According to the Manila Electric Co. (Meralco), electricity rate per kilowatt hour (kwh) for a typical residential household reached P8.25 in July, lower than the P8.61 per kwh posted a year ago, but higher by 0.0761 per kwh from P8.17 kwh in June.

Moreover, Meralco’s generation charge declined to P3.94 per kwh in July from the P4.06 per kwh last year, but rose as compared to the P3.86 per kwh recorded the previous month.

Meanwhile, the DOF estimated that price increases for housing, utilities and fuels in July may have slowed down to 1.7 percent from 2.1 percent in the previous month; furnishings and household equipment to two percent from 2.1 percent; communication to 0.1 percent from 0.2 percent; and recreation and culture to 0.9 percent from one percent.

Beltran also reported that inflation on education, and clothing and footwear likely remained stable at 2.1 percent, while restaurant and miscellaneous services stayed at 1.7 percent.

On the other hand, he said prices for alcoholic beverages and tobacco may have risen to 6.7 percent from 6.2 percent, health to 2.5 percent from 2.3 percent, and transport to 2.8 percent from 2.3 percent.