July inflation further cooled because of slower annual increases of food and electricity prices, according to the Philippine Statistics Authority (PSA).

 

Basic goods prices climbed by 2.4% in July, slower than June’s 2.7% rise and the 5.7% increase observed in the same period last year.

The slowdown came on the back of decreasing price movements for the heavily-weighted food and non-alcoholic beverages index. Particularly, rice prices have dropped in the last three months. This negative inflation in rice prices points to the Agriculture Tariffication Law signed last February by President Duterte targeting to ease the rice prices by replacing rice import quotas with tariffs on rice instead.

Also read: June 2019 inflation slowest since 2017

July inflation was expected by UnionBank’s Economic Research Unit (ERU) at 2.4%, and ERU sees a big window for the Bangko Sentral ng Pilipinas to cut interest rates at the upcoming Monetary Board meeting. This, however, will also depend on Q2 output results. ERU expects Q2 GDP growth to come in at 5.9%.

Also read: Slowest GDP growth in 4 years at 5.6%

Article by Ruben Carlo Asuncion

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