February inflation hits near four-year high

March 6, 2018

Consumer prices rose to a near four-year high of 3.9 percent in February, slightly down from January's four percent using the new base year of 2012, the Philippine Statistics Authority (PSA) said Tuesday.

Using the old base year of 2006 used until February 22, inflation for February would have been 4.5 percent.

"The uptrend resulted from the faster annual gain recorded in the heavily-weighted food and non-alcoholic beverages index at 4.8 percent and the double-digit annual increment in alcoholic beverages and tobacco index at 16.9 percent," said Deputy National Statistician Romeo Recide in the PSA website.

"Inflation during the month was the highest since September 2014," added Recide.

The National Economic and Development Authority (NEDA) said measures to curb inflation and cushion its impact on the poor are urgently needed as the inflation rate reached the upper band of the government’s target.

While still within the 2-4 percent target of the government, Socioeconomic Planning Secretary Ernesto  Pernia said the government should remain vigilant and prepared to implement measures that will mitigate the upside risks to inflation.

“The transitory impact of the TRAIN Law and the continued depreciation of the Philippine peso will mainly influence price movements in the coming months, and we must ensure that mitigating measures should be in place”, the NEDA official said.

Pernia said there is a need to expand the Pantawid Pamilyang Pilipino Program (4Ps) and to fast-track the distribution of unconditional cash transfer (UCT) from the TRAIN.

He also reiterated the call to replace the quantitative restrictions on rice with tariffs. This is expected to lower the price of rice and raise revenues for agricultural programs such as crop diversification and investment in disaster risk resiliency.

“These measures will ensure better stability in the prices of food items and maintain or raise the purchasing power of the bottom 30 percent of households,” he added.

Pernia said the government, through the  lead of the Department of Trade and Industry, needs to strengthen the surveillance of businesses’ compliance with the country’s laws and regulations on fair consumer goods pricing to prevent profiteering.

“We must enforce fair consumer pricing among businesses: In January, there were anecdotal reports that some of them are taking advantage of the TRAIN Law by prematurely increasing their selling prices despite no additional input costs to their production and services brought about by the law,” Pernia said.

In an earlier statement, Pernia said based on the agency’s calculations, around 0.7 percent (at most) of inflation for 2018 will likely be attributable to the effect of TRAIN. DMS