DOF: Inflation rises to 4.9% in June

MANILA, Philippines — Inflation likely accelerated to a fresh five-year high of 4.9 percent in June due to higher prices of food and “sin” products, the Department of Finance (DOF) said yesterday.

In its latest economic bulletin, the DOF said the June inflation may have grown to 4.9 percent year-on-year, faster than the previous month’s 4.6 percent, and last year’s 2.49 percent.

The figure was also above the Bangko Sentral ng Pilipinas’ (BSP) whole year target of two to four percent.

“Food prices contributed to the year-on-year uptick mainly due to vegetables,” the DOF said.

The agency said prices of food and non-alcoholic beverages may have risen 5.6 percent in June. Cost of vegetables, in particular, may have increased 7.49 percent, while rice and fish prices likely grew 4.17 percent and 10.61 percent, respectively.

The DOF said price increases of sin products, namely tobacco and alcoholic products may have continued to be in double digits at 20.44 percent in June.

“For the June inflation rate, sin products contribute as much as 0.46 percentage points,” it said.

The DOF said petroleum also likely contributed to the monthly increase, but it was tempered by the decline in electricity rates.

On the other hand, the DOF said month-on-month price increases of food and sin products likely moderated last month.

Early this week, the interagency Development Budget Coordination Committee (DBCC) raised its 2018 inflation forecast to a range of four percent to 4.5 percent – higher than the Bangko Sentral ng Pilipinas’ target of two to four percent – in line with the high inflationary environment experienced in the first five months.