THE Department of Finance said the inflation rate in March likely accelerated to as high as 5 percent from 4.5 percent a month ago using the 2006 consumer price index, driven mainly by faster increases in the prices of so-called sin products.
Using the new base of 2012 consumer price index, however, inflation rate in March might have settled at 4.1 percent, up from the prior month’s 3.9 percent.
“Sin products are significantly driving the inflationary pressure. Of the 4.1-percent forecast inflation rate for March, sin products account for as much as 0.5 percentage point, much higher than their contribution of only 0.16 percentage point in the same month last year,” the DoF said in an economic bulletin released Wednesday.
“The month-on-month price change which slowed down to 0.24 percent on average from 0.79 percent last month and 0.88 percent in January comes largely from tobacco which rose 8.27 percent, non-alcoholic beverages which rose 2.51 percent, and electricity, gas and fuels which rose 1.66 percent over the previous month,” it said.
Finance said sin products and non-alcoholic beverages were affected by temporary tax issues, while fish appeared to be still affected by rough seas. Vegetables, meanwhile, were hit by unfavorable weather.
The government is set to release the March inflation data today.
Bangko Sentral ng Pilipinas last week said inflation in March 2018 likely settled within the 3.8-percent to 4.6-percent range (based on the 2012 index), driven mainly by higher power rates and prices of petroleum products.
The bank regulator said it considered all recent developments and information that could affect price dynamics before coming up with the March inflation projection.
“The BSP Department of Economic Research projects the 2012-based March 2018 inflation to settle within the 3.8 – 4.6 percent range… Adjustments in electricity rates owing to increased power generation charges as well as higher prices of domestic petroleum products, reflecting recent depreciation of the peso, are expected to contribute to upside price pressures,” Bangko Sentral said.
“There were also observed higher rice prices during the month. Meanwhile, these upside pressures could be partly offset by lower liquefied petroleum gas prices,” it added.
Bankgo said it would continue to monitor closely evolving price conditions against any signs of incipient price pressures, and remained ready to take appropriate measures as necessary to ensure the monetary policy stance continued to support its price stability objectives.
Earlier, Bangko Sentral Deputy Governor Diwa Guinigundo said inflation would remain manageable although it was expected to peak in the third quarter this year.
“In terms of our preliminary estimates on the monthly movements of inflation, we expect inflation to peak by the third quarter and thereafter, we should be seeing on a monthly basis the inflation rate 4 percent or lower than 4 percent,” Guinigundo said in an earlier interview.