Inflation rate is 2.6% in July

PHILIPPINE NEWS SERVICE — The year-on-year headline inflation, or the rate at which consumer prices have risen over a 12-month period, picked up to 2.6 percent in July from 2.3 percent in June because of the uptick in fuel and food prices, the National Statistics Office said yesterday.

Prices month-on-month advanced 0.8 percent in July, faster than 0.6 percent in June, as selected food items such as eggs, meat, milk, fruits and vegetables recorded price increases during the month.

Warm weather caused the low production of chicken and eggs, resulting in higher prices of the two commodities in July, the agency said.

“Likewise, the upward price movements in electricity, kerosene, LPG and gasoline contributed to the uptrend. Higher hospital, dental and medical charges, including those for personal services, were also recorded in Metro Manila,” the agency said.

Higher generation and system loss charges in electricity consumption along with increments in LPG and kerosene prices pushed up the fuel, light and water index.

Year-on-year core inflation, which excludes selected food and energy items, also accelerated to 3.0 percent in July from 2.5 percent in June.

Inflation rate averaged 2.6 percent in the first half of 2006, well below the Development Budget Coordination Committee’s target of 4.0 to 5.0 percent for the whole year.

This figure was also within the Bangko Sentral ng Pilipinas’ forecast for the year of 2.6 to 3.1 percent. Central bank Gov. Amando Tetangco said the six-month inflation average remained manageable.

By commodity group, food inflation hit 2.8 percent in July, faster than 2.6 percent in June with prices of rice, corn, cereal preparations, dairy products, eggs, fruits and vegetables, meat, and miscellaneous foods recording faster increases.

Inflation for fuel, light and water also picked up to 5.5 percent in July from 3.8 percent in June while that for services rose to 2.1 percent from 2.0 percent. Services include educational, medical, personal, recreation, transportation and communication, and others.

“Meanwhile, annual price adjustments were slower in clothing at 2.3 percent from 2.4 percent and in miscellaneous at 1.5 percent from 1.6 percent,” the agency said. Miscellaneous items include household furnishing and equipment, household operations, personal care and effects, and other miscellaneous items.

Inflation for housing and repair stayed at 1.5 percent in July.