DOF projects inflation hitting 5.3% in July
Inflation may hit a new five-year high of 5.3 percent this month, driven largely by higher prices of food, sin products, energy and fuels, the Department of Finance (DOF) said yesterday.
This was higher than the 5.2 percent inflation rate recorded in June 2017, and the 2.4 percent posted in the same month in 2016, the DOF said.
Month-on-month, however, inflation will likely settle at 0.17 percent, slower than the 0.6 percent monthly inflation recorded in June, the DOF said.
“The inflation forecast for July is 5.3 percent year-onyear (YOY) or 0.17 percent month-on-month (MOM). Note that MOM declined from 0.6 percent in June to 0.17 percent in July,” the DOF said.
On a year-on-year basis, the agency said prices of food and non-alcoholic beverages may increase by 6.12 percent this month. In particular, prices of fish may rise by 9.13 percent; vegetables, 11.85 percent; and non-alcoholic beverages, 10.82 percent.
The DOF said it also sees a 21.43 percent spike in the cost of sin products, namely alcoholic beverages (6.05 percent) and tobacco products (29.36 percent).
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Prices of electricity, gas, and other fuels will likely grow by 10.77 percent, according to the DOF.
Meanwhile, the DOF said inflation on food items may decline to 0.04 percent this month from 0.74 percent, and on nonfood items to 0.22 percent from 0.45 percent.
On the other hand, it said month-on-month tobacco and health inflation may rise to 1.23 percent and 0.26 percent, respectively.
The rate of increase in housing, utilities and fuel cost may also accelerate to 0.43 percent month-on-month due to the impact of petroleum products on electricity prices, the DOF said.
Early this month, the interagency Development Budget Coordination Committee (DBCC) raised its 2018 inflation forecast to a range of four to 4.5 percent in line with the high inflationary environment experienced in the first five months.
This was higher than the Bangko Sentral ng Pilipinas’ (BSP) inflation target of two to four percent.