Inflation likely dips anew in July: finance department

July 31, 2017

Prices of widely-used goods and services likely dipped anew last month owing to stable food prices and lower electricity rates, the latest estimate of the Department of Finance (DOF) said Monday. Based on the DOF’s Economic Bulletin dated July 26, 2017, the country’s inflation may have slightly slowed to 2.7 percent in July from 2.8 percent June, but jumping from the 1.9 percent logged in the same month last year. Finance Undersecretary Gil Beltran said in his report to Finance Secretary Carlos Dominguez III that the increase in consumer prices likely moderated after the rate of index heavyweights food and non-alcoholic beverages remained steady last month. The DOF has estimated  prices of food and non-alcoholic beverages clocked at 3.5 percent last month, matching the rate logged in June, but higher compared to 2.7 percent registered in the same month in 2016. Beltran,  also the DOF’s chief economist, further explained power costs dropped during the month compared to the previous year. In the first four weeks of July, Manila Electric Company’s (Meralco) rate per kilowatt hour (kWh) for an average of 200 kilowatts-per-month consumption declined to P8.25 from P8.61 a year ago, but higher than P8.18 in June. But, Meralco’s generation charge per kilowatt jumped to P3.94 last month from P3.86 in June, but the latest figure is cheaper than the P4.06 price saw in the same month last year. “Inflation rate this month (July) is likely to moderate to 2.7 percent on the back of stable food prices. Year-on-year, power rates also declined,” Beltran said. “Continuing benign inflation will enable the economy to sustain rapid economic growth and hurdle volatilities in the world economy with relative ease,” he added. In July, indices alcoholic beverages and tobacco may have rose by 6.7 percent from 6.2 percent in June, health to 2.5 percent from 2.3 percent, and transport from 2.3 percent to 2.8 percent. Prices of housing, utilities and fuels likely decreased to 1.7 percent from 2.1 percent, furnishings, household equipment to 2 percent from 2.1 percent, communication to 0.1 percent from 0.2 percent as well as recreation and culture from 1.0 percent to 0.9 percent. Inflation on clothing and footwear (2.1 percent), education (2.1 percent), and restaurant and miscellaneous services would likely remain at their same levels compared to the previous month. The average price of diesel in Metro Manila among the “big three” oil companies increased to P30.13 per liter last month from P29.7 in the previous month, and P27.55 registered in the same month last year. Average price of gasoline in the first four weeks of July slightly dropped to P43.28 per liter from P43.6 June, but higher compared to P39.88 a year before. DMS