DOF forecasts June inflation at 4.9%

MANILA -- The Department of Finance (DOF) sees inflation increasing even further to 4.9 percent in June, from the 4.6 percent figure posted in May.

In the DOF economic bulletin released on Tuesday, food and nonalcoholic beverages as well as alcoholic beverages and tobacco items are seen to have contributed substantially in the uptick of prices last month.

DOF data showed that food and non-alcoholic beverages went up by 5.6 percent in June 2018, led by price pressure on fish at 10.6 percent. This was followed by prices of non-alcoholic beverages, which increased by 10.15 percent; vegetables, up by 7.03 percent; and rice, up by 4.17 percent.

“Food prices contributed to the year-on-year uptick mainly due to vegetables,” said DOF chief economist Undersecretary Gil Beltran.

“Price increase from sin products continues to be double digit yearon-year even as the month-on-month rate plunged to 0.3 percent from 0.81 percent last May. For the June inflation rate, sin products

contribute as much as 0.46 percentage points year-on-year,” he added. On the other hand, inflation of non-food items increased by 3.89 percent, according to DOF.

“Non-food price also sees 0.33 percent month-on-month increase, driven by education and petroleum products but tempered by the decline in electricity rates. The PHP0.90 to PHP1 per litter price rollback last June 25 likely came after the survey,” Beltran noted.

The Duterte administration’s economic managers have revised their inflation forecasts upward this year to between 4 to 4.5 percent following the inflation data in the first five months of 2018.