FASTER increases in the prices of food and non-alcoholic beverages pushed the country’s headline inflation rate higher to 5.2 percent in June, breaching the high end of central bank’s forecast and government's annual target.
The Philippine Statistics Authority (PSA) on Thursday, July 5, said the June inflation rate is higher than the 4.6 percent recorded in May 2018 and more than double the June 2017 rate of 2.5 percent.
PSA traced the increase to the higher annual rate in the food and alcoholic beverages index at 6.1 percent.
The food index alone went up further to 5.8 percent in June from 5.5 percent in May and 3.1 percent in June 2017.
Faster increases in other indices were also reported: alcoholic beverages and tobacco, 20.8 percent; housing, water, electricity, gas and other fuels, 4.6 percent; furnishing, household equipment and routine maintenance of the house, 3.0 percent; transport, 7.1 percent; communication, 0.4 percent; and education, 4.0 percent.
Only the clothing and footwear index was stable at 2.2 percent.
In the food basket, PSA said higher annual mark-ups were observed in, among others: rice, 4.7 percent; corn, 14.1 percent; vegetables, 8.6 percent; and meat, 5.0 percent.
The Bangko Sentral ng Pilipinas earlier projected the June 2018 inflation rate to hover between 4.3 percent and 5.1 percent as economic managers defended it from criticisms over the delayed tightening of the country’s monetary policy to tame the soaring inflation.
Monetary authorities have twice raised the central bank’s key policy rate, with the latest increase on June 20 bringing the Bangko Sentral overnight reverse repurchase (RRP) facility to 3.5 percent.
Interest rates on the overnight lending and deposit facilities were likewise raised.
The elevated inflation has been attributed to the implementation of a tax reform package at the beginning of 2018.
The Department of Finance (DOF) has assured, however, that the 15-percent average increase in the disposable income of salaried workers due to the Tax Reform for Acceleration and Inclusion (Train) law has “more than fully offset” the 4.1-percent average increase in prices as of May. (Marites Villamor-Ilano/SunStar Philippines)