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Philippines: Inflation likely rose to 4.1% in February
MANILA, Philippines — Inflation likely accelerated to 4.1 percent in February, slightly above the higher end of the government’s two to four percent target range due to the increase in the prices of “sin” products, the Department of Finance (DOF) said yesterday.
In its latest economic bulletin, the DOF said inflation likely settled at 4.1 percent in February, higher than the four percent recorded in January and 3.3 percent in the same month last year.
The DOF attributed the possible increase to the projected uptick in the prices of sin products, such as cigarettes and alcohol, which accounted for 0.4 percentage point of the inflation forecast.
According to DOF estimates, prices of alcoholic beverages and tobacco products may have increased 16.4 percent last month.
“While the 4.1 percent forecast may seem to have breached the higher end of the inflation target range, it is largely on account of the price increase of sin products. These are non-essential and are even harmful, products which we want the general public to steer clear away from on health reasons,” the DOF said.
According to the DOF, the price increase of sin products may have been driven by the increase in excise taxes and the price adjustments made by Mighty Corp. following its compliance with tax laws.
Excise taxes of alcohol products rose four percent in January due to the implementation of Republic Act 10351 or the Sin Tax Reform Law.
Mighty Corp., meanwhile, increased the prices of its brands after the settlement of P25 billion in deficiency taxes to the government and Japan Tobacco International Philippines Corp.’s takeover.
In addition, excise taxes on tobacco products was adjusted upwards to P32.50 per pack under the newly enacted Tax Reform for Acceleration and Inclusion (TRAIN) Act.
Meanwhile, the DOF said food and non-food commodities likely saw their respective rate of prices increases relatively unchanged last month.
The Finance department said energy price inflation (electricity, gas and other fuels) may have declined to 5.5 percent from 7.2 percent in January and 6.2 percent in the same month last year mainly due to base effects.
This is despite the increase in electricity bills and fuels seen last month, the DOF said.
Last February, power rates of the Manila Electric Co. rose to P9.47 per kilowatt hour from P8.72 per kwh in january, and p9 per kwh the same period in 2017.
The price of diesel in the National Capital Region also rose to P41.18 per litre, while gasoline prices grew to P52.60 per liter.
Source: https://www.philstar.com/business/2018/03/06/1793824/inflation-likely-rose-41-february#PKj2yFypM6o8DYwU.99