Philippines Inflation January 2018


Philippines: Inflation jumps to over three-year high in January on higher excise taxes

February 6, 2018

In January, consumer prices increased 1.0% compared to the previous month, notably above December’s 0.3% month-on-month growth and a multi-year high. The rise was largely driven by higher prices for alcoholic beverages and tobacco, and for food and non-alcoholic beverages, especially for fish and fruit. Notably, the Tax Reform for Acceleration and Inclusion (TRAIN), which came into effect this year, hiked excise taxes on a number of products, thus pushing prices up.

Inflation came in at 4.0% in January, accelerating considerably from December’s 3.3% and marking an over three-year high. As a result, inflation hit the upper bound of the Central Bank’s target range for the 2017–2020 period, set at 3.0% plus or minus one percentage point. Meanwhile, annual average inflation inched up to 3.3%, from December’s 3.2%, the highest print since May 2015.

Core consumer prices, which exclude volatile items such as foodstuffs and oil, rose 1.0% over the previous month in January, up notably from December’s 0.3% increase. Finally, core inflation came in at 3.9% in January, a strong jump from December’s 3.0%, marking the highest reading since March 2013.

Philippines Inflation Forecast

FocusEconomics Consensus Forecast panelists expect inflation to average 3.5% in 2018, which is unchanged from last month’s projection. For 2019, panelists see inflation of 3.4%.

Author: Massimo Bassetti, Senior Economist

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Philippines Inflation Chart

Philippines Inflation January 2018

Note: Annual and monthly variation of consumer price index in %.
Source: Central Bank of the Philippines (BSP) and FocusEconomics calculations.

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