Philippine consumer prices rose 12.5 percent in August from a year earlier, tipping yet again a near 17-year peak and at the high end of the central bank's forecast range of 11.8 to 12.6 percent raising the possibility of another rate hike before the year ends. 

 

The pace of annual price increases eased from previous months and the month-on-month inflation rate slowed, signaling that just one more rate raise may be in the offing this year. 

 

The August annual inflation matched market consensus of 12.5 percent in a Reuters poll this week and was the highest rate since December 1991.

 

The National Statistics Office, in a statement, said that inflation rate for August increased from the 12.3 percent in July. The figure for July was revised from 12.2 percent “due to the updates on tuition fees provided by the province,” said NSO.

 

NSO said that except in the food, beverages and tobacco (FBT) index, annual inflation rates were higher in all the commodity groups. The inflation rate last August 2007 was 2.4 percent.

 

The annual inflation rate in areas outside Metro Manila rose higher to 14.2 percent in August from 13.9 percent in July compared to Metro Manila 8.7 percent in August from 8.6 percent in July due to the upward movements in the rates of clothing, housing and repairs and miscellaneous items, said NSO.

 

NSO said that higher annual inflation rates were recorded in nine regions with the biggest increase of 1.5 percentage points (10.8% from 9.3%) registered in CALABARZON. Caraga recorded the highest inflation rate at 22.1 percent while CALABARZON had the lowest rate.

 

Core inflation, which excluded selected food and energy items, increased to 7.0 percent from 6.3 percent in July.

 

Month-on-month, the inflation rate also went up but at a slower rate of 0.3 percent in August from 1.6 percent in July. 

 

NSO said that all commodity groups continued to record higher annual price hikes in August except for FBT whose annual inflation was slower at 17.2 percent from 17.8 percent. 

 

NSO cited however that measured from a month ago, prices at the national level moved at a slower pace of 0.3 percent in August from 1.6 percent in July.

 

The massive infusion of rice by the National Food Authority in markets brought down prices of commercial rice in August. The rice index dropped by -2.2 percent in August from 5.3 percent in July, said NSO.

 

NSO also said that the series of price reductions in gasoline and diesel caused the services index to move at a slower pace of 1.0 percent from 3.1 percent.