MANILA, Philippines (3rd UPDATE) – Inflation or the increase in the prices of goods climbed to another 9-year high, hitting 6.4% in August.
The latest figure, announced by the Philippine Statistics Authority (PSA) on Wednesday, September 5, was higher than July's 5.7%.
This is also the fastest since March 2009, when inflation hit 6.6% during the Arroyo administration.
Annual increases were observed in food and non-alcoholic beverages (8.5%), alcoholic beverages and tobacco (21.6%), furnishing and household equipment (3.5%), health (4%), restaurants and miscellaneous goods and services (4%), and recreation and culture (2.4%).
The annual rate of the food index further climbed by 8.2%. (READ: EXPLAINER: How inflation affects you)
The National Capital Region (NCR) felt higher inflation at 7%. The PSA attributed the uptrend to higher prices of food, household expenses, transportation, recreational activities, and restaurant and miscellaneous goods and services.
Annual inflation in areas outside NCR also jumped to 6.2%, higher than the recorded 5.5% year-on-year. (IN CHARTS: This is how bad August 2018 inflation looks like in regions)
Bangko Sentral ng Pilipinas (BSP) Governor Nestor Espenilla Jr attributed the spikes to the "unfortunate confluence of cost-push factors" and the "elevated oil prices" which drove transport and power prices higher.
"Much of it has to do with food supply shocks, rice in particular. These warrant more decisive non-monetary measures to fully address," Espenilla said.
He added that the BSP will analyze the latest data for their next policy meeting on September 27. (READ: Economic managers pressure Piñol to curb soaring inflation)
Beyond the target range
The Department of Finance and the BSP had forecast August inflation to be only at 5.9%, while economists' median estimate was at 6%.
With the current pace, the government is likely to miss the target of keeping 2018's average inflation within 2% to 4%.
Year-to-date inflation is already at 4.8%. (READ: Robredo to Duterte gov't: 'Stop dismissing inflation as sign of growing economy')
Espenilla previously said they expect inflation to peak between August and September of this year before tapering off in 2019. (READ: Higher inflation in 2019 if rice tariffication not passed – Diokno)
The central bank raised interest rates by 50 basis points (bps) last August, bringing the overnight reverse repurchase (RRP) rate to 4%, to help temper market expectations. (READ: Gov't 'did little or nothing' to stop 6.4% August inflation)
Economists said the elevated prices of goods pulled down the economy's growth. The country's gross domestic product (GDP) grew by only 6% in the 2nd quarter of 2018, missing all market estimates. – Rappler.com