Food, oil price hikes fuel inflation

MANILA, Philippines – Increases in the prices of food, beverages, tobacco and fuel were major contributors in the faster growth of retail prices in Metro Manila in January, the Philippine Statistics Authority (PSA) reported yesterday.

The General Retail Price Index in the National Capital Region rose 3.5 percent in January from 2.5 percent in December 2017. Growth in the index was placed at 4.4 percent in January last year.

All commodity groups recorded higher annual gains during the month but growth was most pronounced in the heavily weighted food index (4.7 percent) and beverages and tobacco (10.1 percent).

Other commodity groups that registered faster growth were crude materials, except fuel; chemicals, including animals and vegetable oil; manufactured goods; machinery and transport equipment, as well as miscellaneous manufactured articles.

Retail prices of softdrinks, cigarettes, gasoline, diesel, engine oil, kerosene and LPG increased in January.

Prices of paint, medicine, bath soap, cosmetics, insecticide, clothing, footwear and office supplies also went up.

In the food index, price increases were seen in fresh eggs, beef, canned meat, milk, butter, ice cream, fish, seafood, rice, corn, bread, fruits, vegetables, raw peanuts, powdered tonic drink, coffee, cooking oil and sauces.

Headline inflation jumped to four percent in January from 3.3 percent in the previous month and 2.7 percent in January last year.

The jump in inflation was anticipated because of the implementation of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) law, which imposes higher excise taxes.

Economic managers attributed the higher food prices to the effects of the TRAIN law, increase in the international prices of crude oil, weak exchange rate, and increase in the price of rice.

The government expects headline inflation to average 4.3 percent this year, above the original target of two percent to four percent.

Rice prices remain high

Farm gate prices of paddy rice continued their upward trend after posting an increase of eight percent in the third week of February, the PSA said.

The agency said the average price of palay rose to P19.93 per kilo from P18.44 last year.

The wholesale price of well-milled rice increased to P40.33 per kilo.

The average retail price of well-milled rice increased to P43.10 per kilo, or up by three percent.

The wholesale price of regular-milled rice was P36.90 per kilo, six percent higher than the previous year. Its average retail price increased six percent to P39.31 per kilo. – Louise Maureen Simeon