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JULY INFLATION EASES, BUT MASKS WIDER DIVIDE www.businessmirror.com.ph
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Thursday, August 6, 2026 Vol. 21 No. 296
P25.00 nationwide | 2 sections 24 pages | 7 DAYS A WEEK
Experts push deeper review of inflation, growth swap
By Justine Xyrah Garcia
VEN as nationwide inflation eased further in July, economists warned that the decline masked a widening divide as price increases continued to accelerate among the bottom 30 percent of households. The Philippine Statistics Authority (PSA) reported on Wednesday that headline inflation slowed to 6.2 percent in July from 6.4 percent in June, although it remained well above the 0.9 percent recorded in July 2025. The latest reading extended the downtrend from the 7.2-percent peak in April. Inflation eased to 6.8 percent in May and 6.4 percent in June, bringing the yearto-date average to 5 percent. The easing, however, was not felt by the poorest households. Inflation for the bottom 30 percent accelerated to 8.2 percent in July from 8 percent in June, pushing their year-to-date average to 5.9 percent.
By Andrea E. San Juan
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HE easing of headline and core inflation coupled with subdued economic activity strengthens the case for the central bank to hit the brakes on raising the key interest rate. Four economists concurred that the softer inflation outturn fuels the case for a pause or a more balanced assessment of the inflation-growth swap. However one bank economist went against the tide, pointing out that the Bangko Sentral ng Pilipinas (BSP) may still need to raise its policy rate further in response to risks to the inflation outlook, particularly a potential El Niño, and the recent wage increases which could lead to secondround inflation effects. Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines (UBP) told the BusinessMirror on Wednesday: “The softer inflation outturn strengthens the case for a pause or a more balanced assessment of the inflationgrowth tradeoff.” Ateneo De Manila University (ADMU) economist Ser Percival K. Peña-Reyes shared this view: “Given the combination of easing headline inflation, easing core inflation, and subdued economic activity, a hold appears to be the more balanced policy choice than another rate hike.” Peña-Reyes said holding the key interest rate steady “allows the BSP to assess the cumulative effects of past tightening while preserving flexibility.” For his part, John Paolo Rivera, Philippine Institute for Development Studies (PIDS) Senior Research Fellow, explained to this newspaper that the stronger case to pause and adopt a waitand-see approach would also enable policymakers “to monitor inflation expectations, the peso, and global developments.” Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co. said the decline in inflation to 6.2 percent in July is a sign that price pressures are easing, adding that this supports consumer spending. As such, Ravelas said this gives the central bank “more room to consider policy easing if the trend continues.”
Ateneo de Manila University economist Ser Percival K. PeñaReyes said the divergence showed that lower nationwide inflation was not translating into equal relief across income groups. “What the divergence suggests is inflation is unevenly distributed. The easing in headline inflation is not benefiting all households equally,” Peña-Reyes told the BusinessMirror. Peña-Reyes explained that low-income households devote a larger share of their budgets to food, housing, electricity, water and transportation, leaving them more exposed to increases in the prices of basic necessities. See “Inflation,” A2
BRAZIL MEAT EXPORTS TO PHL HINGE ON RESPONSE TO ASF By Ada Pelonia
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@adapelonia
ÃO PAULO, Brazil—Brazilian meat exporters are cautiously optimistic about the prospects of their pork exports to the Philippines, which stepped up its purchases in recent years following the outbreak of African swine fever (ASF) in 2019. Data from the Brazilian Animal Protein Association (ABPA) showed that producers here shipped 392,902 metric tons (MT) of pork to the Philippines last year, which accounted for more than a quarter of Brazilian pork exports. The record-high pork shipments from Brazil to the Philippines in 2025 surpassed the
254,331 MT exported by accredited meat plants in 2024. As of June 2026, its pork exports to the country stood at 214,038 MT, up by 32.4 percent from the same period last year. Despite the uptrend trajectory, ABPA Markets Executive Manager Estevão Carvalho raised a caveat that their pork exports only complement the ASF response of the Philippines, which continues to grapple with the deadly hog disease. “We’ve observed that the volumes of export from Brazil to the Philippines will inevitably follow the process of local production recovery,” Carvalho told reporters in Portuguese during a press conference here.
Core inflation above BSP’s 4-percent tolerance ceiling
DESPITE easing for the first time since November 2025, analysts pointed out that a 4.2-percent core inflation signals that underlying price pressures have not completely vanished. As opposed to headline inflation, core inflation excludes volatile food and energy items to show the long-term trend of consumer prices. “The continued easing is encouraging, but core inflation suggests underlying price pressures remain elevated. BSP may have gained some confidence that inflation is moderating but it is not prudent yet to declare victory,” Rivera explained to this newspaper. Peña-Reyes said while the easing trend in headline inflation reduces the urgency for additional hikes, core inflation remaining above the BSP’s tolerance ceiling would likely prompt policymakers to “keep interest rates at restrictive levels until there is stronger evidence that underlying inflation is sustainably returning to the 2 to 4 percent target range.” “Keeping rates unchanged would still represent a restrictive monetary stance, and the BSP could make clear that future decisions will depend on whether inflation continues its path back toward the target range or whether new inflationary pressures emerge,” he also noted.
See “ASF,” A10
Private sector’s bigger role in meat supply eyed By Mary Jade Jadormio
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HE Department of Agriculture (DA) said the private sector must take a bigger role in keeping meat supplies stable and containing price pressures as animal diseases and other risks continue to threaten the livestock industry. Agriculture Secretary Francisco P. Tiu Laurel Jr. cited recurring outbreaks of African swine fever (ASF) and avian influenza, rising production costs, supply-chain disruptions and climate-related risks confronting the sector. He said meat processors have become critical partners in sustaining food production and maintaining the availability of meat products amid these pressures. “Despite these obstacles, you have remained resilient, sustaining food production, protecting livelihoods, and ensuring a stable supply of quality food products,” Tiu Laurel said.
DA continues to expand its swine recovery and poultry development programs while strengthening biosecurity protocols, veterinary services and disease-control measures, particularly against ASF. However, according to Tiu Laurel, rebuilding the livestock sector cannot depend solely on government intervention. “The government cannot accomplish these goals alone. Our progress depends on strong partnerships with industry and other stakeholders,” he said. The agriculture chief urged meat processors to invest in automation, digitalization, traceability systems and smart manufacturing. He said technology would help improve operational efficiency, strengthen food-safety systems and increase the global competitiveness of local meat processors. Companies were also encouraged to strengthen climate resilience, sustainability and responsible reSee “Supply,” A2
In event of upside risks...
ELEVATING THE GAME Philippine gymnasts Sachie Padaynag, Ian Ray Herrera, Rheanmarie Labajo, Joe Maynard Villanueva, and Regie
Boy Continido perform in the Senior Group competition during the 10th Senior Aerobic Gymnastics Asian Championships at the Tagaytay City Velodrome on Wednesday. The championship, running from August 5 to 7, marks the Philippines’s hosting of the continental meet, with athletes from across Asia vying for honors. The event is being staged at the country’s first UCI-standard indoor velodrome, a 250-meter, 3,000-seat facility inaugurated in 2025 that has quickly become one of the nation’s premier venues for international sporting events. NONIE REYES
IF new upside risks emerge such as surge in oil prices, significant peso depreciation, and stronger-thanexpected inflation expectations, analysts said the central bank would probably opt for a 25-basis-point hike instead of a 50-basis-point increase. “If the BSP decides that further tightening is warranted, a 25-basis-point hike would be more appropriate. With both headline and core inflation moving lower, there is less justification for a larger 50-basis-point adjustment,” Asuncion told this newspaper. See “Review,” A2
PESO EXCHANGE RATES n US 60.7510 n JAPAN 0.3766 n UK 79.9850 n HK 7.6491 n CHINA 8.3320 n SINGAPORE 46.4420 n AUSTRALIA 41.8545 n EU 68.5304 n KOREA 0.0412 n SAUDI ARABIA 16.1950 Source: BSP (August 5, 2026)