MANILA – Inflation is likely to settle between 4.3 and 5.1 percent in January given higher fuel prices, the Bangko Sentral ng Pilipinas (BSP) said Thursday.
According to the central bank’s Department of Economic Research (DER), the upward inflationary pressures last month were:
- domestic fuel price hikes
- higher fish and vegetable prices
- annual adjustments in the excise taxes on alcoholic beverages
“Domestic fuel price hikes, due to higher international crude oil prices and the second tranche of the excise tax adjustment from the TRAIN law, is seen to be the primary driver of inflation for the month,” the BSP said.
Oil companies increased pump prices of petroleum products in four consecutive weeks of January.
The Tax Reform for Acceleration and Inclusion (TRAIN) Act, signed into law by President Rodrigo Duterte in December 2017, increases the excise tax on diesel by P2.00 or 80 percent per liter for a total of 4.50 during the second year of the Duterte administration’s tax reform.
TRAIN also raises the excise tax on gasoline by P2.00 or 28.57 percent per liter for a total of P9.00.
The BSP noted, however, that the upward inflationary pressures may have been “partly offset” by several downward pressures.
“These may be partly offset by lower rice prices, downward adjustment in electricity rates, and the slight appreciation of the peso,” it said.
Pangilinan-led Manila Electric Co. lowered electricity rates by P0.3418 per kilowatt hour in January, which translated to a P68 decrease in the bill of a typical household consuming 200 kilowatt hours per month.
In its policy meeting last December, the BSP said it expects inflation to settle at 3.18 percent in 2019. (GMA News)
