CONSUMER prices in June likely rose by 4.9 percent on the back of increases in the prices of “sin products,” as well as of fish, rice and vegetables, according to the Department of Finance (DOF).
Based on the latest DOF economic bulletin, inflation in June may reach 4.9 percent, faster than the previous month’s 4.6 percent and the previous year’s 2.5 percent.
“Inflation in June likely inched up to 4.9 percent year-on-year [YoY], up from the previous month’s 4.6 percent due to base effects and 0.35- percent month-on-month [MoM] increase,” the DOF bulletin read.
The drivers for the increase include the hike in tobacco prices, which likely expanded by 27.83 percent. The rate of increase, however, is slower than the 28.29 percent in May, and the 9.09 percent recorded in June 2017.
Prices of sin products, which include alcoholic beverages and tobacco, may have gone up by 20.44 percent in June. Alcoholic beverages alone likely rose by 5.76 percent.
“Price increase from sin products continues to be double digit YoY, even as the MoM rate plunged to 0.3 percent from 0.81 percent last May. For the June inflation rate, sin products contribute as much as 0.46 percentage points YoY,” the bulletin read.
The hike in fish prices also caused the June inflation rate to accelerate, according to the DOF. Prices may have expanded by 10.61 percent, although the rate is lower than the 11.36 percent recorded in May and the 7.73-percent recorded in June 2017.
The DOF noted that the prices of vegetables may have gone up by 7.49 percent in June, faster than the 7.03 percent in the previous month and the 0.55 percent recorded a year ago. The price of rice and nonalcoholic beverages likely rose by 4.17 percent and 10.15 percent, respectively.
“Food prices contributed to the YoY uptick mainly due to vegetables while MoM inflation of fish and rice price moderated to 0.11 percent and 0.1 percent, respectively,” the bulletin read. The DOF said the month-on-month inflation adjustment can also be attributed to education, which may have gone up by 2.69 percent in June, faster than the 1.78 percent recorded in May and 2.05 percent in June 2017.
According to the DOF, housing, utilities and fuels likely went up by 4.51 percent, faster than the 3 percent in May and the 1.84 percent in June 2017. The hike in the price of furnishings and household equipment also rose by 3.03 percent.
On Monday the Development Budget Coordination Committee reported that it revised its inflation forecast for this year. Inflation for 2018 was projected to hit 4 percent to 4.5 percent, faster than the previous forecast of 2 percent to 4 percent. The government, however, maintained its forecast of 2-percent to 4-percent inflation rate for 2019 to 2022.
“From 2 percent to 4 percent, we’ll make it to 4 percent to 4.5 percent, in recognition of what already happened in the first five months of the year. Year-to-date, [inflation] is 4.1 percent, we expect inflation to taper off in the second half of the year,” Budget Secretary Benjamin E. Diokno said.