Poll: Inflation likely slowed in July

HEADLINE INFLATION likely fell to a near six-year low in July due to softer prices of food and fuel, analysts said.

- By Luisa Maria Jacinta C. Jocson Senior Reporter

A BusinessWorld poll of 17 analysts yielded a median estimate of 1.2% for the July consumer price index, within the central bank’s 0.5%-to-1.3% forecast for the month.

The July print would be slower than the 1.4% in June and 4.4% clip a year ago.

If realized, this would be the slowest inflation in nearly six years or since the 0.6% print posted in October 2019.

The Philippine Statistics Authority is scheduled to release the July inflation data on Tuesday (Aug. 5).

“For July inflation, my forecast is 1.2% and drivers continue to be soft food prices and muted nonfood prices, especially in energy despite some pump price adjustments of late,” Sun Life Investment Management and Trust Corp. economist Patrick M. Ella said.

In July, pump price adjustments stood at a net decrease of P1.10 a liter for gasoline and P1.10 a liter for kerosene. On the other hand, it stood at a net increase of P1.20 for diesel.

Pantheon Macroeconomics Chief Emerging Asia Economist Miguel Chanco said the headline rate may have slowed in July "thanks to what should be a drop in food inflation into the red, outright." "Food and energy prices will likely remain subdued, although the impact of lower rice tariffs, which took effect in late June 2024, will fade from annual comparisons," Moody's Analytics economist Denise Cheok said.

Nicholas Antonio T. Mapa, chief economist at Metropolitan Bank & Trust Co. said July will likely mark the fifth straight month of belowtarget inflation this year as rice deflation persists.

Rice inflation has been on the decline in the last few months as the government has deployed several measures to tame prices of the staple grain. These include slashing tariffs on rice imports, declaring a food security emergency on the commodity, and lowering the maximum suggested retail price (MSRP) for imported rice.