MANILA— The country’s inflation rate accelerated to 4 percent in January 2018 from 3.3 percent the previous month, on the back of higher food and non-food prices as spill-over effects of successive typhoons in 2017, state economists reported on Tuesday.
The Philippine Statistics Authority (PSA), an attached agency of the National Economic and Development Authority (NEDA), attributed the uptrend mainly to the higher annual increment in the heavily-weighted food and non-alcoholic beverages index, which rose by 4.5 percent from previous month’s 3.5 percent.
The food and non-alcoholic beverages segment constitute 39 percent of the consumer basket.
The faster price adjustments, especially for fruits and corn, can be partly traced to the lingering effects of successive typhoons that occurred in the last quarter of 2017.
The PSA said the index for alcoholic beverages and tobacco -comprising only 2 percent of the consumer basket – also rose by 12.3 percent in January 2018 from 6.4 percent in December 2017.
As inflation rate reached the upper band of the government target, the NEDA underscored the need for the country to ensure mitigation measures were in place to cushion the transitory inflationary impact of the Tax Reform for Acceleration and Inclusion (TRAIN) law.
It noted that equally important were vigilant price monitoring and prompt action to curb profiteering.
“The push in inflation is partly due to TRAIN, considering particularly the excise on fuel and additional sin taxes,” NEDA Director General and Socioeconomic Planning Secretary Ernesto Pernia said in a statement.
Pernia reiterated, however, that the effects of the TRAIN, which overhauled the country’s tax system for the first time in two decades, would be minimal and temporary.
The first package of TRAIN reduced the income taxes of 99 percent of the country’s income taxpayers.
The NEDA official also stressed the need to help the poorest 50 percent of Filipino households cope with the transitory impact of TRAIN on prices.
“With the initial inflationary effects of TRAIN, we must ensure the faster provision of financial assistance through the unconditional cash transfer (UCT) program,” said Pernia.
He also reiterated the agency’s call to replace quantitative restrictions on rice imports with tariffs to stabilize the country’s rice supply and lower the price of rice.
Over the medium term, the fast-tracked infrastructure development in the next few years, including reforms in the energy sector, would ease electricity prices, added Pernia.
Meanwhile, among other non-food commodities that posted higher inflation were transport (3.2 percent from 2.4 percent); restaurant, miscellaneous goods, and other services (3.7 percent from 3.0 percent); health (2.6 percent from 2.2 percent); and furnishings, household equipment, and routine maintenance of the house (2.0 percent from 1.9 percent).
The prices of housing, water, electricity, gas, and other fuels, which account for about 22 percent of the consumer basket, slightly eased to 3.7 percent from 3.8 percent in December.