MANILA -- Soaring oil prices in the world market is driving inflation, a finance official said Tuesday, as he maintained that the first tranche of tax reforms should not be blamed for rising consumer prices.
The Tax Reform for Acceleration and Inclusion or TRAIN, which raised duties on fuel, sugar-sweetened drinks and cars, added 0.4 percent to August inflation, which stood at 6.4 percent, said Finance Undersecretary Tony Lambino.
World oil prices rose to $71.90 per barrel in August from $53.37 on Jan. 1, when TRAIN took effect. The peso weakened to P53.30 from P49.74 during the same period, Lambino said.
Lambino said P32 billion in additional disposable income every month due to lower personal income tax rates as well as the expiration of the rent control law also contributed to inflation, he said.
"Without TRAIN, inflation would still be high," Lambino said in a speech aired live on the Presidential Communication Operation Office's Facebook page.
"For those calling for the suspension of oil excise tax, intindihin natin (let's understand), it will lower the price a little bit, but probably not as much as people think," he said.
President Rodrigo Duterte's economic team expects inflation to "moderate" in the coming months as price taming measures are implemented, he said.
"Implementing these solutions is the priority of the Duterte administration's economic development cluster," he said.
The National Food Authority agreed to "immediately release" 4.6 million available sacks of rice from its warehouse to the market to augment supply, while 2.7 million sacks will be allocated for Zamboanga, Basilan, Sulu and Tawi-Tawi to address reported shortages, the economic team said in a statement on Sept. 5.
The NFA Council authorized the importation of 5 million sacks of rice, expected to arrive as early as next month, and another 5 million sacks next year, according to the statement.
To aid in supply issues, the Bureau of Customs said it would prioritize the release of essential food items from ports, the statement said.
The Sugar Regulatory Administration"will open" importation of sugar to direct users to moderate costs, it said.