MANILA -- Inflation eased to 3.3 percent in August as hikes in food prices slowed down, the Philippine Statistics Authority (PSA) said Thursday.

The state statistics bureau said that food inflation was at 3.9 percent in August, versus the 6.4 percent seen in July.

Rice inflation, in particular, slowed to 14.7 percent from 20.9 percent in July. National Statistician Claire Dennis Mapa said the average price of well-milled rice went down from P50.90 a month prior to P50.66 in August.

The PSA noted that transport inflation slowed down to -0.2 percent, against the 3.6 percent recorded in July. Core inflation, which strips out volatile food and energy items, fell to 2.6 percent from 2.9 percent the month before. Meanwhile, inflation for the poorest Filipino families or households with the bottom 30 percent lowest income, fell to 4.7 percent from 5.8 percent a month earlier.

Inflation was at 4.4 percent in July. From January to August, inflation averages 3.6 percent. The government hopes to keep inflation between 2 to 4 percent for this year.

The BSP cut interest rates by 25 basis points to 6.25 percent in August, after keeping its benchmark rate tight for almost a year. The BSP said it expected inflation to further ease this year as rice import tariffs are lowered. Rice inflation has been the major driving factor in pushing up the inflation rate since late last year.

Bangko Sentral cuts interest rates by 25 bps, another rate cut this year likely

Mapa said rice inflation was likely to fall further in September.

“This month of September, it will further go down to single digit because of the base effect nung September 2023 kasi, if you recall, ating rice inflation is 17.9 [percent], so yun yung simula talaga nung double-digit ng rice,” he said.

The National Economic and Development Authority (NEDA) said it hoped the slowing inflation would boost private consumption, which it said was hampered by the high prices of goods.

NEDA added that more consumption would encourage businesses to expand.

It also said lower inflation would encourage investments, as borrowing costs decline.

“Low-income households will benefit from the decline in food inflation, as food constitutes more than half (51.4 percent) of the consumption of the bottom 30 percent of households,” NEDA Secretary Arsenio Balisacan said.

The Bangko Sentral ng Pilipinas, for its part, said risks to the inflation outlook continue to lean toward the downside for 2024 and 2025, with a slight tilt to the upside for 2026.

“The downside risks are linked mainly to lower import tariffs on rice, while upside risks could come from higher electricity rates and external factors,” the BSP said.

President Ferdinand Marcos Jr. said the government would expand Kadiwa stores that offer cheaper agricultural products. He added that the government recently launched a vaccination drive against African swine fever to ensure enough pork supply and prevent price increases.

“These are concrete steps we’re taking to make sure that the Bagong Pilipinas we promised is felt where it matters most—at home. Patuloy ang trabaho. Ipagpapatuloy natin ang pag-usad upang matiyak na makakamtan ng bawat Pilipino ang mas komportableng buhay—sa pamamagitan ng dekalidad na trabaho at murang bilihin," he said.