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Philippines – DOF: Inflation likely rose to 4.5% in April
MANILA, Philippines — Inflation may have accelerated further to 4.5 percent in April due to higher prices of food, non-alcoholic beverages and “sin” products, the Department of Finance (DOF) said yesterday.
In its latest economic bulletin, the DOF said inflation likely accelerated to 4.5 percent in April, higher than the 4.3 percent recorded in March and 3.2 percent in the same period in 2017.
“The year-on-year uptick comes from elevated food prices (e.g. rice and fish) and higher prices of non-alcoholic beverages and sin products. Non-food items also contributed to the uptick albeit at a slower pace,” the finance department said.
According to the DOF, sin products, including tobacco and alcohol, may have been the major reason for the uptick in consumer prices in April.
This was consistent with the earlier view of the DOF, which stated that inflation in the next few months may likely continue to be driven by the adjustments in the prices of sin products, particularly tobacco.
The DOF, however, had said this is not necessarily a bad thing, as it is the government’s goal to discourage the consumption of these products through higher prices, among others.
Despite the higher inflation in April, the DOF noted that price movements are starting to normalize as the rate of increase in the headline inflation is starting to slow down.
Inflation averaged 3.8 percent in the first three months of the year after settling at 4.3 percent in March.
The inter-agency Development Budget Coordination Committee earlier maintained its inflation target at two to four percent over the medium term.
The Bangko Sentral ng Pilipinas (BSP), for its part, expects inflation to average 3.9 percent this year, before easing to three percent next year mainly due to the transitory impact of the Tax Reform for Acceleration and Inclusion (TRAIN) Act.
The law aims to simplify the country’s tax system by by lowering personal income tax rates.
It also seeks to adjust excise taxes of fuel, automobile, coal and sugar-sweetened beverages, and expand the tax base by removing value-added tax exemptions.
Source: https://www.philstar.com/business/2018/05/04/1811864/dof-inflation-likely-rose-45-april#RksMrUfU8b1s7sek.99