INFLATION likely slightly eased to 3.2 percent year-on-year in December as food prices remained stable despite the Christmas holiday celebrations, the Department of Finance said on Wednesday.
In an economic bulletin, DOF Undersecretary and chief economist Gil S. Beltran also attributed the slight moderation in the rate of increase in prices of basic goods last month from 3.3 percent in November to lower power costs.
For Beltran, “low inflation is an indication that the country’s macroeconomic fundamentals remain strong.”
A 3.2-percent inflation rate in December will bring the full-year 2017 average to a similar 3.2 percent, within the government’s target range of 2-4 percent.
“Solid fundamentals backed by TRAIN [the Tax Reform for Acceleration and Inclusion Act package] implementation, rice sector reform and the ‘Build, Build, Build’ policy would push the country’s growth to 7-8 percent this year and sustain manageable inflation,” Beltran said.
Beltran earlier said that removing the quota on rice imports and instead slapping them with a 35-percent tariff rate would bring down domestic prices by up to P7 a kilo.
Last week, the Bangko Sentral ng Pilipinas (BSP) said it expected inflation in December to settle within the range of 2.9–3.6 percent, similar to its forecast in November and faster than a year ago.
“Higher domestic petroleum and rice prices could contribute to upward price pressures, which could be partly offset by the decline in Meralco’s electricity rates and stronger peso,” according to the BSP, citing the projection of its department of economic research.