THE country's headline inflation increased to 4.9 percent in August 2021, the highest since January 2019, as prices of food and electricity soared due to supply disruptions and higher oil prices, respectively, the Philippine Statistics Authority (PSA) reported Tuesday, September 7, 2021.
This was higher than the 4.0 percent in July 2021 and more than double the 2.4 percent in August 2020.
The Bangko Sentral ng Pilipinas (BSP) said the August 2021 inflation was at the high end of the BSP’s monthly forecast range of 4.1 to 4.9 percent for the month.
The resulting year-to-date average inflation rate of 4.4 percent was above the government’s annual inflation target of 3.0 percent ± 1.0 percentage point for the year.
Core inflation, which excludes selected volatile food and energy items to depict underlying demand-side price pressures, also increased to 3.3 percent year-on-year in August from 2.9 percent in July.
On a month-on-month seasonally adjusted basis, inflation rose to 0.6 percent in August from 0.4 percent in the previous month.
Officials said the increase in headline inflation was driven mainly by higher price increases of key food items, particularly vegetables and fish.
Vegetable inflation rose in August due to supply disruptions from damage caused by monsoon rains in parts of the country.
Adverse weather conditions also hampered fishing and port operations, which led to higher fish inflation.
Meanwhile, increased electricity rates due to higher generation and transmission charges along with increased prices of liquefied petroleum gas (LPG) contributed to the rise in year-on-year non-food inflation.
"The latest CPI outturn is consistent with the BSP’s assessment that inflation could settle close to the high end of the target range in the near term before decelerating back to within the target by year end," the Bangko Sentral said in a statement.
The PSA said the heavily weighted food and non-alcoholic beverages posted an inflation rate of 6.5 percent during the month, from 4.9 percent in July 2021.
Moreover, recreation and culture index went up by 0.5 percent in August 2021, after recording annual decreases since August 2020.
Annual increases were also higher in the indices of the following commodity groups: