The Philippine’s overall inflation for the bottom 30% income households continued to exhibit a downward trend as it decelerated further to 5.2 percent in July 2023 from 6.1 percent in the previous month.
This is the lowest inflation observed since April 2022 with an inflation rate of 5.0 percent. This brings the national average inflation rate from January to July 2023 for this group of consumers to 7.6 percent. In July 2022, the headline inflation for this income group was higher at 7.2 percent.
The main driver of the continued downtrend of the overall inflation in July 2023 was the lower year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 6.1 percent in July 2023 from 6.9 percent in the previous month. This was followed by housing, water, electricity, gas and other fuels, which posted an annual mark-up of 3.0 percent during the month from 4.8 percent in June 2023. The third main driver to the slowdown was transport, which exhibited an annual decline of -3.0 percent from -1.2 percent in the previous month.
In addition, slower annual upticks were registered in the indices of the following commodity groups in July 2023:
a. Alcoholic beverages and tobacco, 11.2 percent from 12.0 percent;
b. Clothing and footwear, 5.2 percent from 5.4 percent;
c. Furnishings, household equipment and routine household maintenance, 6.0 percent from 6.3 percent;
d. Health, 3.4 percent from 3.7 percent;
e. Restaurants and accommodation services, 7.6 percent from 7.8 percent; and
f. Personal care, and miscellaneous goods and services, 6.0 percent from 6.2 percent.
Headline inflation declines further to 5.2 percent – PSA
On the other hand, faster annual increases were posted in the indices of recreation, sport and culture at 6.0 percent in July 2023 from 5.8 percent in the previous month; and education services at 3.3 percent from 3.2 percent. The indices of the rest of the commodity groups moved at their respective previous month’s annual rates.
The following commodity groups were the top three contributors to the July 2023 overall inflation for the bottom 30% income households:
a. Food and non-alcoholic beverages, 64.8 percent share or 3.4 percentage points;
b. Restaurants and accommodation services, 11.0 percent share or 0.6 percentage point; and
c. Housing, water, electricity, gas and other fuels, 9.0 percent share or 0.5 percentage point.
The food inflation for the bottom 30% income households decelerated further to 6.1 percent during the month from 7.0 percent in June 2023, marking the fifth consecutive month of lower inflation for this income group. In July 2022, food inflation stood at 7.1 percent.
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