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Inflation accelerated beyond target in April, says Pernia


Inflation is expected to have exceeded the government’s target range in April, the National Economic and Development Authority (NEDA) said Thursday.

“It’s probably going to be higher,” Socioeconomic Planning Secretary Ernesto Pernia told reporters on the sidelines of the ADB 51st Annual Governors Meeting in Pasig City.

The Philippine Statistics Authority (PSA) is scheduled to release the April inflation figures on Friday, May 4. Inflation clocked in at 4.3 percent in March, but DBS expects prices to continue going higher.

The March figures were the fastest in at least four years, but Pernia believes this could be exceeded by inflation in April.

“Well, oil prices are really going up. They have been going up consistently in the past several weeks, also the depreciation of the peso and also the TRAIN is ... a culprit,” he said.

The Tax Reform for Acceleration and Inclusion (TRAIN) was signed into law by President Rodrigo Duterte on December 19, 2017, lowering the personal income tax rates and expanding the value-added tax (VAT) base starting January.

Pernia said inflation is expected to continue accelerating in the coming months, but this could slow down during the last three months of the year.

“Maybe it will peter out in the last quarter of the year—start to peter out,” he said.

One downward pressure to inflation, Pernia noted, is the removal of quantitative restrictions (QRs) on rice imports.

“As soon as tariffication replaces QRs, it should be felt toward the latter part of the year,” he said.

Pernia last month said he expects Congress to pass the rice tariffication bill by the second half of the year.

How much this would affect inflation as a downward pressure?

“Maybe ... at least 1 percentage point, more or less,” Pernia noted. —VDS, GMA News

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