INFLATION LIKELY ROSE TO 3.5% IN JAN – POLL

INFLATION probably accelerated in January and could prompt monetary authorities to adjust key interest rates as early as this week, analysts polled by The Manila Times said. Forecasts for the month ranged from 3.4 percent to 3.9 percent with a 3.5 percent average, higher than the 3.3 percent recorded in December.

The Bangko Sentral ng Pilipinas (BSP) also expects an increase to 3.54.0 percent, citing the implementation of a new tax law, while the Department of Finance has said that the rise in consumer prices could have stayed unchanged at 3.3 percent.

Official January data will be released tomorrow by the Philippine Statistics Authority.

All nine analysts polled said the yearago rate of 2.7 percent would have been surpassed as upward price pressures from higher taxes would have boosted the consistently higher consumer price growth seen since the start of 2017.

‘Sharp’ price hikes

“The Philippines headline CPI (consumer price index) inflation rate is expected to surge higher in January, due to the impact of sharp rises in retail petrol prices following a spike in world oil prices at the end of 2017 and higher excise taxes on fuel,” IHS Markit APAC chief economist Rajiv Biswas said.

Implementation of the Tax Reform for Acceleration and Inclusion (Train) law would have also pushed up indirect taxes on other products, he noted, lead

“[D]ue to the sharp upturn in head - bust economic growth and rapid credit expansion, the BSP is expected to adopt a more hawkish stance on monetary policy during 2018,” Biswas said.

the upper end of the Bangko Sentral’s 2.0- 4.0 target range for the year, he said the Monetary Board could tighten monetary policy by 25 basis points in Thursday’s meeting, with a second rate hike coming in the second quarter.

ANZ Research economist Eugenia Vic percent for the month, pointing to tax reforms having led to higher transport costs and prices of sugar-sweetened beverages.

“Adding to the upside risk is the rise