CEBU Province’s inflation rate eased to three percent in August, down from four percent in July, mirroring the broader national trend of declining inflation.
Despite this decrease, the current rate remains elevated compared to 2.5 percent in August 2023.
Inflation is the rate at which the general prices of goods and services in an economy rise over time. As prices increase, the purchasing power of money decreases, meaning you can buy less with the same amount of money.
All three highly urbanized cities (HUCs) in the province also experienced a decline in inflation in August.
Cebu City’s inflation eased to 4.8 percent from 5.3 percent in July. Mandaue City’s inflation also slowed down to 5.6 percent from 6.2 percent. Lapu-Lapu City’s inflation also fell to 5.6 percent from 6.1 percent.
Cebu Provincial chief statistical specialist Melchor Bautista, on Tuesday, Sept. 17, 2024, said the common sources of the downtrend of headline inflation in Cebu and its three HUCs were the slowdown in transport, food and non-alcoholic beverages and housing, water, electricity, gas and other fuels indices.
“Like in transportation, our fuel has decreased and the cost of transporting food has also been reduced,” said Bautista.
Cebu Province’s lower inflation rate of three percent was mainly due to the significant decrease in inflation in transport, food and non-alcoholic beverages and furnishings, household equipment and routine household maintenance indices.
Inflation in transport dropped to -12.6 percent from -0.4 percent in July. The province also recorded a slower annual growth rate of food and non-alcoholic beverages index at 7.8 percent in August from 9.6 percent in July.
Slower annual increments were also noted in furnishings, household equipment and routine household maintenance at 2.1 percent (from 3.1 percent) and health services at 4.5 percent (from 5.3 percent).
For the City of Cebu, the deceleration of headline inflation at 4.8 percent was influenced by the slower annual increment of food and non-alcoholic beverages to 6.6 percent from 9.9 percent in July, followed by the transport index which recorded a faster annual decline of -1.5 percent inflation from 3.7 percent in July. Education services also contributed with a slower annual increase of 4.3 percent from 6.7 percent in July 2024.
Despite the slowdown, Cebu City’s current inflation rate is still higher than the four percent inflation recorded in August 2023.
The decline in Lapu-Lapu City’s inflation to 5.6 percent was mainly driven by the food and non-alcoholic beverages index easing to 3.5 percent from 5.9 percent in July. This was followed by the faster annual decrease of the transport commodity group at -1.4 percent from 4.1 percent and the slowdown in inflation in restaurants and accommodation services to 17.4 percent from 18.1 percent also contributed to the downtrend.
However, Lapu-Lapu City’s current inflation rate remains significantly higher than the 2.9 percent recorded in August 2023.
The deceleration of inflation in Mandaue City at 5.6 percent was influenced by the slower year-on-year increase in the food and non-alcoholic beverage at 2.7 percent from six percent followed by the faster decline of transport index at -2.3 percent from 3.1 percent. The third major source of the deceleration was the health index at 3.5 percent from four percent in July.
However, the city’s inflation rate is still higher than the three percent recorded in August 2023.
Inflation outlook
The country’s inflation slowed further to 3.3 percent, down from 4.4 percent in July. This decline brought the average inflation rate to 3.6 percent, comfortably within the government’s target range of two to four percent.
According to the Bangko Sentral ng Pilipinas, the headline inflation slowed mainly because of lower food and non-food inflation as well as negative base effects. Rice inflation decelerated markedly on the back of continued import arrivals levied with lower tariffs. Meanwhile, downward adjustments in domestic petroleum prices drove the decline in transport inflation.
BPI’s lead economist Emilio Neri Jr. forecasted September inflation to be further eased to 2.5 percent as the rice supply continues to improve.
Think-tank Asean+3 Macroeconomic Research Office (Amro), on the other hand, sees inflation slowing further to 3.3 percent in 2024.
“While upside risks such as wage increases and local food supply shocks remain, the slowdown of headline inflation is expected to continue in the second half of 2024 due to lower international prices of fuel and food and tariff cuts on imported rice,” Amro said. / CDF, KOC