Philippine annual inflation eased for a sixth straight month in July, the statistics agency said on Friday, reflecting slower increases in food and utility costs.
The consumer price index rose 4.7% in July, its slowest annual increase since March 2022, but the inflation rate remained above the central bank’s 2% to 4% target for the year.
Headline inflation for January to July averaged 6.8%.
Economists in a Reuters poll had forecast the consumer price index would rise by 5.0% for July, above the central bank’s projection for a 4.1% to 4.9% rise for the month.
Core inflation, which strips out volatile food and fuel items, slowed to 6.7% in July, falling from 7.4% in the previous month.
The Bangko Sentral ng Pilipinas (BSP), which next meets on Aug. 17, has kept interest rates steady at its last two meetings after nine rate hikes totaling 425 basis points that brought its key policy rate to 6.25%.
The BSP said it was ready to tighten monetary policy as necessary to keep a lid on price pressures.
Though prices cooled for a sixth straight month, the BSP said that upside risks from wage and transport fare hikes and bottlenecks in food supply remain.
“The BSP stands ready to adjust the monetary policy stance as necessary to prevent the further broadening of price pressures as well as the emergence of additional second order effects,” it said in a statement following the inflation data.
In an interview with CNN on BSP Governor Eli M. Remolona reiterated the central bank’s readiness to act to bring inflation back to its target and anchor consumer price expectations.
“If supply side shocks are large enough and they are not compensated by weaker demand, then yes we will have to raise again,” Mr. Remolona said. “We are not out of the woods yet.
Mr. Remolona, who last week said it was too soon to declare a victory against inflation, added: “We are not ready to ease.”
ING Economist Nicholas Antonio T. Mapa said in a post the central bank could only consider rate cuts when inflation fell within the target and if the US Federal Reserve, which last week delivered its 11th rate increase, begins easing. — Reuters