PRICES of consumer goods in the Philippines are expected to climb significantly higher than the government’s target range this year, given the persistence of high prices of basic goods and necessities.
In a briefing on Monday, the inter-agency Development Budget Coordination Committee (DBCC) said it hiked its inflation assumption for 2024 at 5.0 percent to 7.0 percent.
This is higher than the 2.5 percent to 4.5 percent assumption the body made in December, and also above the government’s target range of 2.0 percent to 4.0 percent.
Headline inflation clocked in at 7.6 percent in March, but core inflation — which excludes select food and energy items — stood at 8.0 percent, the highest since March 1999’s 8.1 percent.
“The average inflation rate assumption for 2023 is increased… given the persisting high prices of food, energy, and transportation costs,” Budget Secretary Amenah Pangandaman said.
Sought for comment, Bangko Sentral ng Pilipinas (BSP) deputy governor Francisco Dakila said the higher inflation assumption follows the year-to-date inflation print, which stood at 8.3 percent.
“We are projecting that the inflation path will continue to decelerate and will, barring the occurrence of any further shocks coming from the supply side, will begin to [fall in the target range] sometime between the fourth quarter of this year — most probably around October and November,” he said.
In its latest policy meeting, the Monetary Board of the BSP said it expects inflation to average 6.0 percent this year, and decelerate to 3.0 percent in 2024.
Aside from faster growth in consumer prices, the economic cluster said it expects the implementation of additional taxes in 2024, as part of the Medium-Term Fiscal Framework (MTFF).
This includes the first four measures — the Passive Income and Financial Intermediary Taxation Act, value-added tax on digital service providers, and excise taxes on single-use plastics, and pre-mixed alcohol.
“There will be three additional tax reform measures such as excise tax on sweetened beverages, motor vehicle road user’s tax, and mining fiscal regime that will be pursued starting in 2025,” the DBCC said in a joint statement.
The DBCC expects P53.7 billion in additional revenues from the excise tax on sweetened beverages, P15.8 billion from the motor vehicle road user’s tax, and P12.4 billion from the mining fiscal regime in their first year of implementation. (GMA News)
