News TOP

News Detail

BSP sees February inflation to hit 4-4.8%

Philippine monetary officials forecast domestic rate of price increases to range between 4 and 4.8 percent in February 2018.

“Higher electricity rates and food prices, along with the full pass-through of higher excise taxes on petroleum products and sugar sweetened beverages, could lead to upward price pressures for the month of February, “ the Bangko Sentral ng Pilipinas (BSP), citing its Department of Economic Research (DER), said in a statement Thursday.

In the first month this year, inflation rose to 4 percent from month-ago’s 3.3 percent due to faster rise of the heavily-weighted food and non-alcoholic beverages to 4.5 percent from the previous month’s 3.5 percent and the double-digit rate of the alcoholic beverages and tobacco index to 12.3 percent from 6.4 percent last December.

Core inflation, which excludes volatile food and oil, registered at 3.9 percent, faster than the 3 percent last December and 2.5 percent in January last year.

With the inflation uptick last January, central bank’s policy-making Monetary Board revised upwards its average inflation forecast for this year to 4.34 percent from 3.4 percent last December.

The 2019 forecast was hiked to 3.49 percent from 3.23 percent last December.

Earlier, BSP Monetary Policy Sub-Sector (MPSS) Managing Director Francisco G. Dakila Jr. said the adjustment in the central bank’s average inflation forecasts for the two-year period was made after the Board included the impact of the implementation of the first package of tax reform starting January 1 this year.

“In the December 14 meeting (of the MB), the impact of tax reform was not included in the baseline forecast. Now that TRAIN (Tax Reform for Acceleration and Inclusion) law has been passed, the baseline assessment includes the TRAIN impact,” he said.

He added that the MB, in his policy meeting last December, considered the impact of the proposed tax reform program as an upside risk to the rate of price increases.

TRAIN’s first package cut workers’ income tax rate but its impact on state revenues will be countered by the increase and introduction of excise taxes for fuel and sugar-sweetened beverages, among others.

Joann Villanueva / PNA