INFLATION may have accelerated in February given “sin” product price hikes, the Finance department claimed on Monday.
“[The] inflation rate … likely edged higher to 4.1 percent,” the department said in an economic bulletin issued ahead of Tuesday’s release of official inflation data.
Consumer price growth picked up to 4.0 percent in January and many observers expect a breach of the Bangko Sentral ng Pilipinas’ 2.0-4.0 target.
Analysts polled by The Manila Times have an average 4.1-percent forecast for February and the BSP itself expects a result between 4.0-4.8 percent.
Food and non-food commodity price growth was likely “relatively unchanged while those of sin products may have likely accelerated,” the Finance department said.
“The latter may be explained partly by price increase due to sin tax hikes and partly by the appropriate price adjustments of Mighty Corporation following its paying the right amount of taxes,” it added.
Power rates and pump prices also increased in February but energy price inflation probably still moderated to 5.5 percent from 7.7 percent in January due to base effects.
While the 4.1 percent forecast represents a breach of government’s 2.0-4.0 percent inflation target, the Finance department stressed that this would largely be on account of pricier tobacco and alcohol products.
“These are non-essential and are even harmful, products which we want the general public to steer clear away from on health reasons,” it said.
“Of the 4.1 percent forecast, 0.4 percentage point is accounted for by sin products,” it added.