World oil price hikes, 2nd excise tax seen driving inflation in January

ABS-CBN News

Posted at Jan 31 2019 08:25 PM

MANILA - Inflation is expected to settle between 4.3 to 5.1 percent in January, with fuel price hikes seen as the primary driver of inflation for the month, a Bangko Sentral ng Pilipinas (BSP) think-tank said Thursday. 

The BSP's Department of Economic Research (DER) said fuel costs climbed this month due to higher world oil prices and the second tranche of excise taxes on petroleum products under the Tax Reform for Acceleration and Inclusion (TRAIN) law. 

Fuel excise taxes increased by P2 per liter for gasoline, P2 for diesel, P1 for kerosene, and P1 per kilogram for LPG starting January 1. 

The BSP think-tank said higher fish and vegetable prices and the annual adjustments in the excise taxes of alcoholic beverages from the Sin Tax Law could also result in additional upward price pressures. 

"These may be partly offset by lower rice prices, downward adjustment in electricity rates, and the slight appreciation of the peso," it said. 

Inflation eased in December last year as food and transportation prices continued to fall.