Food inflation rises due to weather-related supply issues

YEAR-on-year headline inflation rose from 0.9 percent in July to 1.5 percent in August, within the Bangko Sentral ng Pilipinas’ forecast range of 1.0 to 1.8 percent for the month. 

This brings the average inflation for the first eight months of the year to 1.7 percent, below the government’s inflation target range of 2 to 4 percent.

Food inflation increased as weather disturbances adversely affected the supply of key food commodities, particularly vegetables and fish. By contrast, rice prices declined further due to lower international rice prices, sufficient domestic supply, and government measures to stabilize prices. 

Non-food inflation also picked up in August, as domestic fuel prices at the pump increased relative to the previous month.

On a month-on-month seasonally adjusted basis, headline inflation was at 0.5 percent in August. Core inflation accelerated from 2.3 percent in July to 2.7 percent in August. 

The BSP sees average inflation falling below the target in 2025 before returning to the target range in 2026 and 2027. 

Going forward, the BSP will continue to monitor emerging risks to inflation and will determine the appropriate response of monetary policy to safeguard price stability conducive to sustainable economic growth and employment.