January inflation drops to 10-month low at 4.4%

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Metro Manila (CNN Philippines, February 5) — Inflation was at a 10-month low in January, the Philippine Statistics Authority (PSA) said Tuesday, driven mainly by cheaper food and non-alcoholic beverages.

January inflation rate was 4.4 percent from 5.1 percent in December. Compared to January 2018, inflation was higher by a percentage point.

PSA said prices of food and non-alcoholic beverages eased by more than a point from 6.7 percent in December to 5.6 percent.

It said slower price increases of alcoholic beverages and tobacco, clothing and footwear, housing, water, electricity, gas and other fuels, health, and transport also contributed to the slower inflation.

Officials said the inflation rate may not have yet factored in the full impact of the second fuel excise tax hike under the Tax Reform for Acceleration and Inclusion (TRAIN) law, which imposed an additional P2 for every liter of diesel and gasoline, P1 for every liter of kerosene, and P1 for every kilogram of cooking gas or liquefied petroleum gas beginning January 1.

"I believe that not many gasoline stations have already included the excise tax for January so this report that we're having may not yet include the full effect of the additional excise tax from TRAIN," National Statistician Lisa Grace Bersales said.

TRAIN has been blamed for the price spikes last year, which peaked at 6.7 percent in September and October. Economic managers high fuel prices brought about by movements in the world market.

Inflation in Metro Manila was down from 4.8 percent in December to 4.6 percent in January. The lowest regional inflation rate was in the Cordillera region at 3.1 percent, while the highest was still in the Autonomous Region in Muslim Mindanao (ARMM) at 6.1 percent.

Malacañang said the Duterte administration will make sure ordinary consumers will benefit from slower inflation.

"We will remain on guard in monitoring the prices of basic goods and commodities as we aim to mitigate poverty and hunger, driven by the President's economic goal to lay down and build the foundation to a comfortable life for the present and future generations," Presidential Spokesperson Salvador Panelo said.

Meanwhile, meat prices at Nepa Q Mart in Quezon City were unchanged since inflation peaked in October.

 

The National Economic and Development Authority, Department of Finance and the Department of Budget and Management said in a statement that they will continue to push for the full implementation of measures to stop supply bottlenecks, which they say caused price surges in agricultural products last year.

One such measure is the proposal to allow private rice traders to import rice with a levy, which is up for President Rodrigo Duterte's signature.

The government's economic team also called on the Department of Agriculture to facilitate a comprehensive crop management system to match farming activity with supply-demand conditions and to work to become resilient and adaptive to extreme weather events, which could affect crops.

They also urged the fisheries sector to intensify the sustainable management of coastal and other marine resources.

They again called for the timely release of unconditional cash transfers for the poor and fuel vouchers for jeepney drivers to cushion the impact of inflation.

The Bangko Sentral ng Pilipinas expects the annual inflation rate to slow down to 3.2 percent this year from 5.2 percent in 2018. The government's target is 2 percent to 4 percent.

CNN Philippines' Xave Gregorio, Rex Remitio and Ina Andolong contributed to this report.