Inflation rate likely eased to 1.2 percent in January from 1.5 percent in December, following the slump in global oil prices, an official of the Finance Department said Wednesday.
Finance Undersecretary and chief economist Gil Beltran said in an economic bulletin inflation this month would likely register at 1.2 percent, “as food prices normalize, fuel prices continue to fall and electricity rate reaches five-year low.”
Power rate at the franchise area of Manila Electric Co. fell 13 percent to P8.72 per kilowatt-hour in January from a year ago. It was also 2 percent lower than that of December.
Electricity rate has declined in the past months, pulled down by lower generation charges.
Beltran, however, said upward price pressures might come from housing rentals and cost of education.
Beltran said the slower inflation period might continue in the coming months, amid the slump in oil prices in the international market.
Oil prices last week plummeted to less than $30 per barrel as the expected increase in Iranian crude exports added to the oversupply concerns.
“The period of benign inflation is extended due to low fuel prices,” Beltran said.
He said this would enable the country to grow faster and investments to continue rising as companies might take advantage of the similarly benign interest rate environment despite the US Federal Reserve liftoff and volatile financial markets.
“Investors can take advantage of the spike in consumer demand that usually accompanies the election season,” he said.
The government will release the official inflation data for January on Feb. 5.
Bangko Sentral ng Pilipinas maintained the inflation target for the next two years at 2 percent to 4 percent.