Monthly inflation figure in January clocked in at 4.4 percent, a 10-month low. The 4.3 percent in January 2018 is a huge drop from the 5.1 percent in December 2018.
The Philippine Statistics Authority (PSA) said that food and non-alcoholic beverages increased by 5.6 percent this year versus 6.7 percent in December 2018.
This figure on the other hand has not yet reflected the impact of the second tranche of the fuel excise tax under the Tax Reform for Acceleration and Inclusion (TRAIN) law. This resulted to an additional P2.00 per liter for both diesel and gasoline, and another P1.00 per kilogram for cooking gas, LPG and kerosene. This took effect in January 1.
Gasoline stations with inventory levels from 2018 cannot implement the new excise tax.
The key influencer in the inflation spikes last year was the TRAIN law. Inflation reached a high of 6.7 percent in September and October last year. This was accompanied by higher fuel prices from the world market. Oil prices abroad, however, have started to go down since the fourth quarter of 2018.
The rise in the price of rice also contributed to higher inflation rates as supply went down last year. The government has already lifted import restrictions on rice abroad. This is needed to avoid last year’s supply problem. Another proposal to allow private rice traders to acquire rice abroad with level is ready for signature of the President.
The Bangko Sentral ng Pilipinas (BSP) expects inflation to be around 3.2 percent this year. It is expected to be better than the 5.2 percent in 2018. This is also within the band target of the government at 2-4 percent.
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