Inflation...

“Nevertheless, BSP will be closely monitoring the situation and stand ready to take timely action based on our evaluation of all relevant data,” Espenilla said.

The BSP chief said earlier the first round upward inflationary effects of TRAIN are transitory, but monetary authorities would closely assess the next round effects and how inflation expectations would be affected.

The PSA said the uptrend in inflation last month was primarily due to higher annual increment in the heavily-weighted food and nonalcoholic beverages index to 4.5 percent in January from 3.5 percent in December.

The index for alcoholic beverages and tobacco registered a double-digit annual markup to 12.3 percent from 6.4 percent as the implementation of the TRAIN Law in January raised prices of cigarettes and alcoholic beverages in most of the regions.

Likewise, other commodity groups recorded higher increases led by restaurant and miscellaneous goods and services with 3.7 percent; transport with 3.2 percent, health with 2.6 percent as well as furnishing, household equipment and routine maintenance of the house with two percent. The country’s food alone index jumped to 4.5 percent last month from 3.7 percent in December as weather disturbances affected supplies of fish and vegetables in the markets.

The National Economic and Development Authority (NEDA) said there is a need to fasttrack the provision of cash transfers to vulnerable sectors and liberalize rice trade to drive down the price of the staple.

“With the initial inflationary effects of TRAIN, we must ensure faster provision of financial assistance through the unconditional cash transfer (UCT) program,” Pernia said.

This, he said, would help the poorest 50 percent of Filipino households cope with the transitory impact of TRAIN on prices, he added.

He also reiterated the agency’s call to replace quantitative restrictions on rice imports with tariffs to stabilize the country’s rice supply and lower the price of rice.

“When the quantitative restrictions are replaced by tariffs, the government will also be better able to help enhance the country’s competitiveness and productivity in agriculture. Revenues from tariff on imported rice will be used to finance government programs for agriculture,” he said.