FOLLOWING the confirmation that inflation rose by 2.7 percent in January, a local retailer warned of higher inflation rates over the next months.
“Expect that this will not go down, but up,” said Philippine Retailers’ Association (PRA) Cebu president Robert Go, who anticipated as early as December last year that consumer price increases would spike in 2017.
On Tuesday, the Philippine Statistics Authority (PSA) traced the uptick in headline inflation to faster price increases in non-food items, namely: clothing and footwear (2.8 percent), health (2.6 percent), transport (2.4%), restaurant and miscellaneous goods and services (2.2 percent), as well as housing, water, electricity and fuel (1.8 percent).
The 2.7 percent headline inflation was the highest after the 3.7 percent recorded in November 2014. December 2016 inflation stood at 2.6 percent, while inflation in January 2016 accelerated by 1.3 percent.
However, the PSA noted a slower price increase in food, from 3.6 percent in December to 3.4 percent in January.
For his part, Go said various factors in local and international economies will are also likely to push inflation up. Go owns and runs the retail store chain Prince Hypermart, with over 25 branches in the Visayas and Mindanao.
One factor is the peso-dollar exchange rate, which already hovers near the P50 level and could make imported goods more costly.
In their latest joint issue of the Market Call, First Metro Investments Corp. (FMIC) and the University of Asia and the Pacific (UA&P) reported further weakening of the peso past the P50:$1 level, which may occur before the end of the first quarter, mainly due to the impending Federal Reserve interest rate hikes in the US.
Oil price increases and the fuel tax increase proposed by the Department of Finance (DOF) will further pressure consumer prices to increase, said Go.
“Everything is connected. So when prices of oil go up and we have the dollar (getting stronger), that will surely cause prices to also go up,” Go said in a phone interview.
Although the recently approved P13 wage increase in Metro Cebu may appear little to many, Go said this will stimulate price increases.
The central bank has projected inflation in the first month of the year to hover at 2.3-3.2 percent.