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Inflation Update: Philippine inflation expected to ease despite 4.4% spike in July
BSP likely to cut rates as long-term inflation outlook remains stable.
By Metrobank Research
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The Philippines experienced a sharp increase in inflation in July 2024, with the rate climbing to 4.4% year-on-year from 3.7% in June. This uptick, which exceeded market expectations, was primarily driven by higher prices in housing utilities and food items.
However, core inflation, which excludes volatile food and energy prices, actually decreased to 2.9% from 3.1% in June. Despite July’s spike, the year-to-date average inflation of 3.7% remains within the Banko Sentral ng Pilipinas (BSP) target range.
Looking ahead, we anticipate that July’s inflation reading may represent the peak for 2024. Several factors support this outlook, including expected moderation in rice prices due to reduced tariffs, softening oil prices, and weakening domestic demand.
Although the current elevated infl