DOF eyes further drop in PH inflation rate for December to 3.2%

SHARE
Vegetables are sold at a local market. DOF forecasts December 2017 inflation at 3.2 percent, slower than the 3.3 percent in the previous month “on the back of more stable food prices and lower power costs.” INTERAKSYON FILE PHOTO

MANILA – The Department of Finance (DOF) projects another deceleration in the rate of price increases in the Philippines for December 2017 as macroeconomic fundamentals continue to remain strong.

In its economic bulletin, the Finance department forecasts December 2017 inflation at 3.2 percent, slower than the 3.3 percent in the previous month “on the back of more stable food prices and lower power costs.”

It explained that “low inflation is an indication that the country’s macroeconomic fundamentals remain strong.”

“Solid fundamentals backed by TRAIN (Tax Reform for Acceleration and Inclusion) 1 implementation, rice sector reform and the Build, Build, Build policy will push the country’s growth to seven to eight percent this year and sustain manageable inflation,” it said.

As of end-November last year, inflation averaged at 3.2 percent, within the government’s 2 to 4 percent target for 2017-19.

Last November, inflation went down to 3.3 percent after peaking for the year at 3.5 percent last October.

In its economic bulletin, the Finance department sees inflation of food and non-alcoholic beverages and of rice to remain flat at 3.2 percent and 1 percent, respectively, last December from the previous month’s level.

However, an uptick is seen for the alcoholic beverages and tobacco to 6.2 percent from month-ago’s 6.1 percent.

Inflation of non-food items is generally projected to slow down to 2.8 percent in the last month of 2017 from 3.3 percent last November.

Citing Department of Energy (DOE) and Manila Electric Company (Meralco) data, DOF said rate per kilowatt hour for 200KW/month consumption last December went down to PHP9.25 from last November’s PHP9.63.

Meralco’s generation charge per kilowatt hour also went down to PHP4.60 from month-ago’s PHP4.91.

Price of gasoline in the National Capital Region (NCR) in the last month of last year declined to PHP48.12 percent liter from month-ago’s PHP48.48.

On the other hand, price of diesel rose to PHP36.20 per liter from PHP35.46 per liter last November.

The Philippine Statistics Authority (PSA) is scheduled to release the December 2017 inflation report on Friday, Jan. 5, 2018.