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Philippines: DOF sees 4.9% inflation in May
MANILA, Philippines — Inflation likely further accelerated to 4.9 percent in May due to increased prices of food, transportation, and sin products, the Department of Finance (DOF) said over the weekend.
In its latest economic bulletin, the DOF said inflation last month may have settled at 4.9 percent, the highest since 2013 under the 2012 rebased series.
This also represents a faster pace from the previous month’s 4.5 percent inflation rate, and the 2.9 percent recorded the same month last year.
However, the DOF said inflationary momentum on a month-on-month basis likely continued to slow down from 0.5 percent in April to 0.3 percent in May.
“Inflation may appear to be rising year-on-year, but it is actually decelerating as the month-on-month inflation continues to drop,” the DOF said.
According to the DOF, supply problems continued to affect food prices last May. It said the cost of rice may have increased 4.78 percent, while those of vegetables and fish likely rose by 9.36 percent and 13.63 percent, respectively.
As compared to last month, however, the rate of increase in rice prices likely slowed down to 0.52 percent, and fish prices to 0.72 percent, the DOF said.
Meanwhile, the DOF said electricity, gas, and fuel prices may have grown by 4.45 percent last month. This is, however, slower than the 4.65 percent increase recorded in April, translating to a 1.1 percent price decline month-on-month, according to the DOF.
Transportation prices, for its part, may have continued its upward momentum, rising by 6.12 percent in May, reflecting domestic petroleum prices.
Prices of sin products and non-alcoholic beverages also likely rose by 20.46 percent and 11.56 percent, respectively.
Restaurants, which the DOF said benefited mostly from the income tax cut, also saw a 3.8 percent increase in prices last month, the DOF said.
According to the DOF, inflation would be tempered down if the problem in food supply is resolved, given that food accounts for 35.5 percent of the consumer basket.
“Rice tariffication will help temper rice inflation, while productivity programs for the food sector would enhance longer-term price stability,” the DOF said.
Based on a study by the National Economic and Development Authority, the passage of the rice tariffication bill currently pending in both houses of the Congress is projected to reduce the price of rice by P4 to P7 per kilogram.
The Bangko Sentral ng Pilipinas earlier said the measure could slash inflation by 0.4 percentage point this year if implemented by the third quarter, or 0.2 percentage point if implemented in the last quarter.
Source: https://www.philstar.com/business/2018/06/04/1821298/dof-sees-49-inflation-may#UiS6w6wAeOB4Irxj.99