The rate of increase in consumer prices may have slightly inched up last month, mainly on higher alcoholic drinks and tobacco prices as well as transport costs, latest estimates by the Department of Finance (DOF) revealed.
This “benign” inflation outlook will give macroeconomic policy makers “room for maneuver” in responding to possible external shocks and in supporting robust growth for the rest of the year, according to Finance Undersecretary Gil Beltran.
Based on this latest DOF economic bulletin, Beltran said inflation may settle at 2.0 percent in August, slightly higher than 1.9 percent in the previous month and well above the 0.6 percent registered a year ago.
But despite the increase, Beltran said the August inflation forecast is at the lower end of the Bangko Sentral ng Pilipinas (BSP)’s target range of 2.0 percent to 4.0 percent for the year.
“The benign inflation outlook for the rest of the year will give macroeconomic policy makers room for maneuver in responding to external shocks and enable them to support robust growth for the rest of the year,” said Beltran in a report to Finance Secretary Carlos Dominguez III.
In August, prices of alcoholic beverages and tobacco may rise from July’s 5.8 percent to 6.4 percent; transport could reverse from negative 0.1 percent to a faster 0.3 percent; and housing, utilities and fuels could increase from negative 0.2 percent to 0.1 percent.
Likewise, prices of clothing and footwear may increase from 2.5 percent in July to 2.7 percent; health could jump from 2.4 percent to 2.6 percent; furnishings, households equipment may rise from 2.0 percent to 2.1 percent while restaurants and misc. services could inch up from 2.3 percent to 2.4 percent.
Meanwhile, the general price increase for food and non-alcoholic drinks (2.7 percent), recreation and culture (1.8 percent) as well as education (1.8 percent) are expected to remain steady in August.
In contrast, prices of communication may slow to zero percent in the month from 0.1 percent in July.
In the first four weeks of August, Manila Electric Co. (Meralco)’s rate per kilowatt hour (kwh) for an average of 300 kilowatts-per-month consumption dipped to P8.82 from P8.93 in July and P9.44 a year ago.
Meralco’s generation rate per kwh also fell to P3.86 during the month from P4.06 in July and P4.55 in the previous year.
Also, the average price of diesel in Metro Manila among the “big three” oil companies slid to P26.12 per liter from P27.55 in the previous month, although higher than P24.95 registered in the same month last year.
Average price of gasoline in the first four weeks of August also declined to P39.07 per liter from P39.88 in July and P42.94 a year before.
Beltran said the projected manageable uptick in the growth of consumer prices will continue to boost domestic demand as well as counterbalance weaker global-growth outlook.
He said that headline inflation is expected to remain benign in the near future and thus help further boost the country’s economy.
