Philippine Inflation Accelerates

Philippines inflation has accelerated to 3.8% during the first quarter of 2018 due to the uptick in prices of food items in light of the tax reform law. In a press conference in Manila on Friday, Bangko Sentral ng Pilipinas deputy governor, Diwa Guinigundo, said headline inflation rose to 3.8% in January to March, GMA reported. This compares with 3% on average recorded in the fourth quarter of 2017 and 3.2% in the first quarter of last year. “Inflation pressures during the review quarter were traced mainly to higher price increases in selected food commodities and tobacco products,” Zeno Abenoja, BSP Department of Economic research director, said during the briefing. The first quarter inflation settled near the upper range of the BSP’s target of 2 to 4% for the year. Guinigundo said the acceleration was “derived from supply side factors, which is expected to be transitory and therefore not persistent.” The tax reform for acceleration and inclusion law, signed by President Rodrigo Duterte in December, took effect in January. It lowered the personal income tax rates but raised the excise taxes on petroleum products, automobile, and sugar-sweetened beverages.