Philippine annual inflation accelerates to 4.4% in July

MANILA – Philippine annual inflation accelerated in July, reflecting a faster pace of food and utility increases, the statistics agency said Tuesday.

The consumer price index (CPI) rose 4.4% in July, above the previous month’s 3.7%, bringing year-to-date inflation to 3.7% and close to the top of the central bank’s target bandwidth is 2.0%-4.0%.

Economists polled by Reuters had forecast rates of 4.1% for July, at the lower end of the central bank’s forecast range of 4.0% to 4.8% for that month.

Core inflation, which excludes volatile food and oil prices, eased to 2.9% in July from 3.1% in June, government data showed.

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said Monday the monetary authority may consider cutting interest rates if price pressures continue to ease.

The BSP, which has kept the policy rate steady at 6.5% in the last six meetings, will review the direction of interest rates at its August 15 meeting. By then, it would also have second-quarter gross domestic product data.

Separate data on Tuesday showed exports shrank 17.3% in June from a year earlier, while imports shrank 7.5%. That led to a trade deficit of $4.3 billion in June, smaller than the previous month’s revised deficit of $4.7 billion. — Reuters