MANILA — The Philippines’ inflation rate slowed to 6.2 percent in July, the Philippine Statistics Authority said on Wednesday.
The July clip was slower than the 6.4 percent inflation rate in June and the 6.8 percent rate seen in May. This was also within the 5.6 and 6.6 percent forecast of the Bangko Sentral ng Pilipinas. But it was still above the 2 to 4 percent target range of economic managers.
The deceleration brings the average inflation rate for the first seven months of 2026 to 5 percent, said PSA Undersecretary and National Statistician Claire Dennis Mapa.
The downtrend was primarily driven by slower price increases in the transport sector, which decelerated to 11.9 percent from 12.8 percent the previous month. Slower increases in the costs for education, as well as restaurant and accommodation services, also helped pull the headline rate lower.
Core inflation, which strips out volatile food and energy items, eased to 4.2 percent from 4.4 percent in June.
Despite the slight deceleration, basic necessities continue to strain household budgets. Food and non-alcoholic beverages remained the largest contributor to the overall inflation rate. National food inflation held stubbornly flat at 5.3 percent, driven predominantly by cereals and rice. Meanwhile, housing, water, and electricity costs saw faster annual increases, ticking up to 8.2 percent during the month.
Electricity costs spike, poorest feel the pinch hardest
Mapa noted that the increase in electricity costs was the highest in 3 years at 16.9 percent. The previous record for the highest spike in power costs was in March 2023 when prices rose 17.3 percent.
He also noted that inflation actually surged for the poorest segment of the population. For the bottom 30 percent of households, inflation surged to 8.2 percent. Mapa said this was because food made a bigger share of the basket of goods consumed by poor people, and food costs had gone up.
“The uptrend in the food inflation was mainly due to the faster annual increase in the rice index at 19.3 percent in July 2026 from 17.0 percent in the previous month,” the PSA said.
The Department of Economy, Planning and Development meanwhile, said the dip in the inflation rate showed that government programs were working to tame prices.
“While challenges remain, particularly in managing food price pressures, these results show that our interventions are making a difference in easing the impact on Filipino households,” said DEPDev Secretary Arsenio Balisacan.
“While inflation is moving in the right direction, our work is far from over. We will continue advancing measures to keep essential goods affordable while creating more opportunities for a better quality of life,” Balisacan said.
The July clip was also much higher than the 0.9 percent inflation rate seen in the same month last year.
In its last policy-setting meeting, the BSP hiked its benchmark target reverse repurchase rate by 25 basis points to 4.75 percent, citing elevated inflation.