DOF: February inflation likely accelerated to 4.1%

Higher prices of cigarettes and alcoholic beverages likely fueled inflation to breach the government’s projection of 2 to 4 percent, the Department of Finance said Monday.

The inflation rate likely clocked in at 4.1 percent in February, likely on account of higher prices of sin products, the department noted in “The DOF Economic Bulletin.”

These are non-essential and are even harmful, products which we want the general public to steer clear away from on health reasons.

“Of the 4.1-percent forecast, 0.4-percentage-point is accounted for by sin products,” the DOF said.

“While the 4.1-percent forecast may seem to have breached the higher end of the inflation target range, it is largely on account of the price increase of sin products,” it said.

The central bank last month said inflation is expected to accelerate further in February, possibly reaching 4.8 percent in February, due to higher utility rates during the month.

Pangilinan-led Manila Electric Co. (Meralco) in February raised electricity rates by P1.08 per kilowatt-hour.

Sought for comment, University of Asia and the Pacific (UA&P) School of Economics Dean Cid Terosa said inflation is widely expected to accelerate further in February from the 4.0 percent in January, the fastest in over three years.

In a text message, Terosa said he expects inflation to settle from 4.0 percent to 4.6 percent in February.

"This can be traced to the TRAIN Law, rice supply issues, adverse practices of retailers, and higher oil prices," he said.