Fiscal planners project higher inflation in March averaging 4.1 percent, a rate comparably lower than that forecast for the period by their host and neighbor at the Bangko Sentral ng Pilipinas complex along Roxas Boulevard.
According to the Department of Finance (DOF), inflation, using 2012 as base year of the consumer price index (CPI), likely ranged higher in March as consequence of the uptick in the price of the various “sin” products that are now levied a higher excise tax.
The DOF acknowledged had the CPI been based on 2006 prices as the base year, the inflation rate in March would have averaged even higher at 5 percent.
The 4.1-percent forecast for the month is also higher compared to inflation averaging only 3.9 percent in February.
“The year-on-year change is dominated by sin products which rose by 22.45 percent and food and nonalcoholic beverages, which rose by 5.25 percent. [The] sin products and nonalcoholic beverages were affected by temporary tax issues, while fish appears to be still affected by rough seas. Vegetable prices were affected by unfavorable weather,” the DOF said.
With 2012 as base year, the price of alcoholic beverages and tobacco may average 22.45 percent in March, higher than the actual inflation rate of 16.85 percent in February and 7.48 percent in the same month last year.
The price of food and nonalcoholic beverages was seen averaging 5.25 percent for the month, higher than the 4.79 percent recorded in February, and the 2.88 percent in March last year.
The DOF particularly said tobacco products remain the top drivers for the widening inflation in March.
“Sin products are significantly driving the inflationary pressure. Of the 4.1-percent forecast inflation rate for March, sin products account for as much as 0.5 percentage point, much higher than their contribution of only 0.16 percentage point in the same month last year,” the DOF added.
The price of clothing and footwear was seen at 2.06 percent, also higher compared to the previous month’s 2.02 percent, but lower than the 2.89 percent recorded in March 2017.
Housing, utilities and fuels were seen inching up to 2.72 percent for the month, higher than the February rate of 2.64 percent, but lower than the previous year’s 3.70 percent.
The price of furnishings and household equipment may settle at 2.24 percent, lower than the 2.51 percent recorded in February and the 2.56 percent in March 2017.
Health may settle at 2.12 percent lower than the 2.15 percent in the previous month, and the 3.32 percent in March last year.
The price of transportation was seen to reach 4.54 percent, lower than the 5.76 percent in February and the 5.72 percent in March last year.
Communication was seen to settle at 0.21 percent, from 0.20 percent the previous month, and 0.50 percent in March last year.
Recreation and culture was seen to hit 1.44 percent, higher than the 1.37 percent in February, and the 1.01 percent last year.
Education may settle at 2.31 percent inching up from 2.29 percent in the previous month, but lower than the 3.06 percent last year.
Restaurants and miscellaneous services were seen to hit 2.75 percent from 2.49 percent in February, and the 1.49 percent in March last year.
Meralco’s rate per kilowatt-hour may rise to P10.32 for the month, from P9.67 year-on-year, and P9.47 in February this year. Its generation charge per kWh may also rise to P5.30 from the P4.90 YoY and P4.65 in the previous month.
For March, diesel prices in the National Capital Region may settle at P41.15 per liter, from P31.01 per liter recorded YoY, while gasoline prices may increase to P52.75 per liter, from P45.71 YoY.
Image credits: Alysa Salen