THE central bank expects headline inflation in January to settle within the 2.3 percent to 3.2 percent range, having factored in the drop in rice and electricity prices, as well as higher gas costs and sin tax adjustment.
The January inflation estimate by the Bangko Sentral ng Pilipinas (BSP) compares with the 2.6 percent headline inflation in December and 1.3 percent in January 2016.
“The BSP forecast suggests that January inflation could settle within the 2.3-3.2 percent range,” BSP Governor Amando Tetangco Jr. said in a text message to reporters on Thursday.
“Downward price pressures include a slight decline in rice prices and lower power rates in Meralco [Manila Electric Co.]-serviced areas,” Tetangco said.
Meralco earlier announced there would be a price cut of P0.27 per kilowatt-hour to the electric bills of typical households this January, bringing the total rate to P8.09 per kWh.
“However, higher domestic prices of gasoline, diesel and LPG [liquefied petroleum gas]as well as the excise tax adjustments for alcoholic beverages and tobacco products would likely exert upside pressures on inflation during the month,” he added.
Cigarette tax, following the implementation of the Sin Tax Law, has risen to P30 per pack since January 1. The previous rates were P25 for brands selling for P11.50 and below and P29 for those selling above P11.50 per pack.
For beer, lager beer, ale, porter and other fermented liquors, the levy increased to a uniform P23 per liter.
Tetangco assured the public that the BSP will continue to monitor emerging price conditions to ensure price stability conducive to a balanced and sustainable economic growth.