Fare hike already factored into new inflation target

Inflation growth would not overshoot the new target set for this year and next as increases in transportation cost have already been factored into the new assumptions, Socioeconomic Planning Secretary Ernesto Pernia said yesterday.

On Tuesday, the Development Budget Coordination Committee adjusted upwards the inflation forecasts for this year to a range of 4.8 percent to 5.2 percent as well as next year’s assumptions to a range of two percent to four percent.

This is consistent with the government’s assessment that inflation will ease to the target level by next year.

Pernia said that in making these assumptions, the increase in transportation costs have already been factored in.

“The effect (on inflation target) would not be significant because transport price hikes have already been factored in,” he told reporters yesterday.

The Land Transportation Franchising and Regulatory Board (LTFRB) approved yesterday to make permanent the P1 increase granted in July and an additional P1 for the first four kilometers travelled, raising the minimum fare of P8 to P10.

The LTFRB also granted on Thursday a provisional P1 hike in bus fares for the first five kilometers. Commuters would be charged another 15 centavos for every succeeding kilometer.

This brings the minimum bus fare to P11 from P10 for buses plying Metro Manila and to P13 from P12 for provincial buses.