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Inflation quickens in January due to higher taxes

Updated

By Chino Leyco

The rate of increase (annual basis) in consumer prices further quickened at a much faster pace in January this year on the back of higher costs of petroleum as well as sin products, but the level stayed well within the government’s target for the month.

Customers buy vegetables at a market in Manila (Czar Dancel / MANILA BULLETIN FILE PHOTO)

Customers buy vegetables at a market in Manila
(Czar Dancel / MANILA BULLETIN FILE PHOTO)

The country’s inflation rate clocked in at 2.9 percent last month, higher than the 2.5 percent registered in December, 2019, but slower compared with 4.4 percent in the same month last year, data from the Philippine Statistics Authority (PSA) showed.

The faster inflation, which is the highest since the 2.7 percent in June 2019, was no surprise for the government as the Bangko Sentral ng Pilipinas already predicted that the rate would be around 2.5 percent to 3.3 percent in the first month of this year.

According to the PSA, the culprits for the accelerated inflation were the spike in prices of fuels as well as alcoholic beverages and cigarettes, or items that suffered a fresh round of scheduled tax increases.

In January, prices of alcoholic beverages and tobacco rose 19.2 percent, while housing, water, electricity, gas, and other fuels jumped by 2.5 percent.

The PSA also tracked that prices of heavily weighted food and non-alcoholic beverages increased by 2.2 percent during the month.

In particular, year-on-year price adjustments were seen in meat that rose by 3.4 percent, fish up by 8.8 percent, fruit higher by 7.7 percent, and vegetables jumping by 8.3 percent.

Meanwhile, rice prices declined by 6.5 percent.

Other consumer items that also saw higher inflation were transport at 3.0 percent, recreation and culture at 1.5 percent and education at 4.7 percent.

On the other hand, a slower price increase of 2.6 percent was noted in restaurant and miscellaneous goods and services.

Excluding selected food and energy items, core inflation also went up further by 3.3 percent in January from 3.1 percent in December 2019, but slower than the 4.4 percent in the same period last year.

In Metro Manila, inflation slowed down to 2.7 percent in January from 2.8 percent in the previous month and 4.6 percent a year ago.

Except in Cordillera Administrative Region, whose inflation remained at 2.8 percent, all the regions in areas outside Metro Manila posted higher annual mark-ups in January.

The highest inflation was still observed in Region V (Bicol Region) at 3.9 percent, while the lowest remained in Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) at 1.0 percent.

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