MANILA, Philippines — Inflation rose further to 6.4 percent in July due to higher transportation costs and higher prices of staple food items, according to data provided by the Philippine National Bureau of Statistics on Friday.

 

Inflation in July was higher than June's 6.1%, but also within the highest range of 5.6% to 6.4% forecast by the Central Bank of the Philippines, according to data released by the Philippine Statistics Authority.

 

Dennis Mapa, the national statistician, said: “The increase in inflation in July was due to faster price increases for food and non-alcoholic beverages. The second category of goods with faster inflation was transport, the third category It's catering and lodging services."

 

He added that food and beverages had an inflation rate of 6.9 per cent and accounted for 64 per cent of the overall inflation rate, while the transport sector had an inflation rate of 18.1 per cent and food and accommodation services had an inflation rate of 3.4 per cent.

 

That puts inflation on average at 4.7% in the January-July period this year, above the government's forecast of 2% to 4%.

 

In a statement, the BSP said the July figures were consistent with the central bank's assessment of the recent rise in price pressures.

 

It said the central bank was aware that price pressures were building amid a second-round effect, including approved wage and fare hikes, as well as higher inflation expectations.

 

In addition, inflation is likely to remain elevated for the rest of the year due to price pressures from global uncertainties such as disruptions to global supply chains, as well as aggressive tightening of policy rates by the U.S. Federal Reserve.

 

Some analysts say inflation could even breach the 7% mark in the second half of the year. So far, the central bank has raised its benchmark interest rate by 125 basis points to curb inflation. The non-cyclical adjustment in July brought the key policy rate to 3.25%.

 

Central Bank of the Philippines Governor Felipe Medalla said another 50- or 75-basis-point rate hike is possible at the Monetary Committee's Aug. 18 meeting.

 

National Economic Development Administrator Arsenio Balisacan said the P4.1 billion in targeted cash transfers would ease the burden on the poor in the Philippines. "In our near-term socio-economic agenda, we want to ensure that every Filipino has adequate and healthy food on their table. We are also helping to reduce energy, transportation and logistics costs, especially It's for the vulnerable in our population."

 

"Our immediate priority is to ease price pressures and protect the purchasing power of the public by implementing programs to help Filipinos cope with the impact of higher inflation," he added.

 

Meanwhile, both Central Bank Governor Medela and Minister of Finance (DOF) Benjamin Diokno said the country's economy is strong enough to absorb the impact of the recent rate hike.

 

Bank of the Philippines (BPI) Chief Economist Jun Neri said earlier that in the 10 years before the pandemic, the country's economy grew by an average of 6%, even though the average interest rate was closer to 4%.