Headline inflation eased for a fourth consecutive month to 6.1 percent in August, falling within the Bangko Sentral ng Pilipinas (BSP)’s forecast range as food prices eased.

The Philippine Statistics Authority (PSA) reported on Friday morning that headline inflation eased by a modest 0.1 percentage point in August from 6.2 percent in July, falling within the central bank’s 5.5 to 6.5 percent forecast range for the month.

“Overall food inflation went down amid a more stable domestic supply, driven by the decline in vegetable prices and the slowdown in inflation for fish. By contrast, rice inflation accelerated, partly due to higher logistics costs,” the BSP said in a statement.

“Lower electricity and water rates moderated inflation for housing, water, electricity, gas, and other fuels. Higher global crude oil prices pushed up domestic pump prices, which led to faster inflation for transport in August.”

Inflation for the bottom 30 percent of households held steady at 8.2 percent, while core inflation—which excludes volatile food and energy prices—likewise eased to 4.1 percent, its third consecutive month of decline.

For the first eight months of the year, headline inflation has averaged 5.2 percent, well above the BSP’s annual 3 percent target and more than three times the 1.7 percent recorded in the same period last year.

The central bank has hiked interest rates three times since the onset of the Middle East conflict at the beginning of March, by a cumulative 75 basis points, bringing its key policy rate to 5 percent. The BSP has cited the deteriorating inflation outlook as the main driver, with its latest hike on 27 August coming amid risks beyond the Gulf.

“Posing further risks to inflation is the possible impact of a severe El Niño event and potential minimum wage adjustments. These underlying price pressures require preemptive monetary action,” BSP Governor Eli Remolona Jr. said.

The central bank still sees headline inflation surpassing its 3 percent annual target until 2028 despite some minor revisions. Economists have noted that further tightening from the BSP may be warranted as the onset of the El Niño season, combined with the impending Metro Manila wage hike, adds further pressure to inflation.

“There is a risk that inflation could pick up further in the coming months in view of second-round inflation effects or higher prices of other affected goods and services, or pass-through effects, especially due to higher minimum wages, going forward,” RCBC Chief Economist Michael Ricafort said.

Remolona likewise acknowledged that the Super El Niño season, which could result in higher food inflation due to crop damage, and the approved P85 minimum wage hike in Metro Manila further cloud the inflation outlook.

“We will tighten as much as we need to to bring the [inflation rate] to its target,” he said.