BSP projects 3.9 to 4.7 percent inflation range for July 2021

​The BSP projects July 2021 inflation to settle within the 3.9 – 4.7 percent range.

Higher prices of domestic petroleum products and key food items along with the upward adjustment in Meralco electricity rates and a weaker peso are the main sources of upward price pressures for the month.

Moving forward, the BSP will continue to monitor emerging price developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved.

The country’s headline inflation rate slowed down to 4.1 percent in June 2021, after recording an inflation of 4.5 percent for three consecutive months. This brings the Philippines’ average inflation for the first semester of 2021 at 4.4 percent. In June 2020, inflation was registered at 2.5 percent.

The slower pace in June 2021 was primarily due to the lower annual rate of increase in the transport index at 9.6 percent, from 16.5 percent in May 2021.  Moreover, inflation slowed down in the indices of the following commodity groups:

• Alcoholic beverages and tobacco, 11.2 percent;
• Clothing and footwear, 1.6 percent;
• Health, 2.9 percent; and
• Communication, 0.2 percent.

BSP projects 3.9 to 4.7 percent inflation range for July 2021

Meanwhile, inflation rates were higher in the indices of food and non-alcoholic beverages at 4.7 percent; housing, water, electricity, gas, and other fuels, 2.4 percent; and restaurant and miscellaneous goods and services, 3.9 percent.

The rest of the commodity groups retained their respective previous month’s annual growth rates.

Meanwhile, the national Social Weather Survey of June 23-26, 2021, found 48% of Filipino families rating themselves as Mahirap or Poor, 23% rating themselves as Hindi Mahirap or Not Poor, and 29% placing themselves on the borderline dividing the two categories (recorded by SWS as Borderline Poor).

This is similar to the findings in May 2021 when 49% felt Poor, 17% felt Not Poor, and 33% felt Borderline Poor.

The movement of the Self-Rated Poor is compatible with the series of official poverty incidence rates. Still, it is both more up-to-date and revealing of the volatility of poverty during intermediate points of time.