The Department of Finance (DOF) said elevated food and oil prices pushed the country’s inflation higher to 3.9 percent in the first three months this year.
In an economic bulletin, fiscal planners plotted inflation averaging 3.9 percent in the first quarter, with inflationary pressures coming from increased food and oil prices.
“[The] inflation rate in March inched up to 4.3 percent from 3.8 percent the previous month. The DOF’s internal forecast was 4.1 percent. For the first quarter of the year, inflation rate averaged 3.9 percent,” the DOF said.
Earlier, the Philippine Statistics Authority said the country’s inflation in March climbed to 4.3 percent, higher than the revised 3.8-percent rate for February, as well as the target range of the Bangko Sentral ng Pilipinas ranging from of 2 percent to 4 percent.
The price of food and nonalcoholic beverages inched up to 5.86 percent in March, from 4.79 percent the previous month, using the 2012 as base year.
In the same month, the price of rice settled at 3.60 percent from 2.77 percent in February, 12.86 percent for fish from the February level of 11.22 percent, and vegetable prices to 5.99 percent from the previous month’s 2.58 percent.
“As expected, the inflationary pressure came largely from elevated food prices [e.g., rice, fish, and vegetables] due to absence of NFA [National Food Authority]. Rice [and] rough seas limited fish supply and bad weather affected vegetables, respectively,” the DOF added.
The price of alcoholic beverages and tobacco also inched up to 18.57 percent from the 16.85 percent in February.
“Appropriate adjustments in prices of ‘sin’ products, tobacco specifically, will continue to fuel inflationary momentum in the near term. However, the government is precisely discouraging the consumption of these products through higher prices, among others,” the DOF said.
For nonfood items, housing, utilities and fuels reached 2.91 percent from 2.64 percent the previous month. Restaurants and miscellaneous services also increased to 3.04 percent from 2.49 percent in February.
“Nonfood items, mainly fuels and restaurants contributed to the uptick as world petroleum prices rose and SSB [sugar-sweetened beverage] taxes continued to bite, respectively,” the DOF added.
Last year President Duterte signed into law the Tax Reform for Acceleration and Inclusion (TRAIN) law that aims to lower the personal-income tax while pursuing offsetting measures.
Under the TRAIN, offsetting measures include the tax rates imposed on SSBs of P6 tax per liter for juices and energy drinks and P12 per liter for beverages with high-fructose corn syrup.
For oil and petroleum, the tax rates imposed are P3 for kerosene, P2.50 for diesel and P1 for liquefied petroleum gas. All petroleum products used as input, feedstock, raw materials for petrochemicals and refining, or as replacement fuel, are exempt.
Image credits: Alysa Salen