Earlier this week, on August 5, the Philippine Statistics Authority (PSA) reported that inflation eased to 6.2% in July, down from 6.4% in June. That marks the third straight month of slower inflation since the peak of 7.2% in April.
At first glance this looks like good news, and in a narrow sense it is. But a closer look at the data suggests that inflationary pressures are far from gone, and we remain heavily exposed to global shocks beyond our control.
Let’s start with the headline figure of 6.2%, which is still well above the government’s target range of 2% to 4%. Inflation has averaged 5.0% since January, so even if prices behave for the rest of the year, 2026 will almost surely end above target.
Core inflation (which excludes volatile food and energy items) also slowed, from 4.4% to 4.2%. That tells us the easing was not confined to the most volatile items. But core remains above 4%, and this can be taken as a sign that price pressures have already seeped into the broader economy.
At least, prices rose by just 0.1% from June to July. Month-on-month movements tend to be noisy, but this suggests the momentum of price increases could at least be slowing.
