Inflation probably eased to as low as 0.8 percent this month or picked up slightly to 1.6 percent, the Bangko Sentral ng Pilipinas (BSP) said on Thursday, with the lower cost of power, fuel and transport to offset higher rice prices and “sin” taxes.
“The BSP forecasts January inflation could settle within the 0.8 percent to 1.6 percent range,” central bank Governor Amando Tetangco Jr. said in a text message to reporters.
Inflation accelerated to 1.5 percent in December, its biggest rise in six months. Data for January is scheduled to be released by the Philippine Statistics Authority on February 5.
Tetangco said the decline in power rates, lower domestic oil prices and a downward adjustment in the minimum jeepney fare would offset a slight uptick in rice prices as well the annual adjustments in taxes on alcohol and tobacco products.
Earlier this month, Manila Electric Co. implemented a P0.21 per kilowatt-hour (kWh) cut in its power rates, which translates to P41.30 in monthly savings for a typical household consuming 200 kWh.
Oil companies such as Pilipinas Shell, Eastern Petroleum Corp., Phoenix Petroleum and PTT Philippines, meanwhile, announced a roll back in pump prices at the start of the month.
Last week, the Land Transportation Franchising and Regulatory Board approved a 50-centavo jeepney fare cut amid plunging fuel prices. The adjustment took effect on January 22, bringing the minimum jeepney fare to P7 from P7.50.
The central bank’s January forecast is well below the 2 percent to 4 percent target for the year. It has said that headline inflation could average 2.4 percent this year before inching up to 3.2 percent in 2017.
“Going forward, the BSP will continue to monitor closely evolving price conditions in line with the BSP’s commitment to price stability conducive to balanced and sustained economic growth,” Tetangco said.