TRAIN law has little effect on inflation rate, Pernia says

National Economic Development Authority (NEDA) Secretary General Ernesto Pernia on Monday said the Tax Reform for Acceleration and Inclusion (TRAIN) law has minimal effect on the recent spike in inflation rate.

"Ang estimate namin, ang contribution ng TRAIN law is only 0.4 of 1 percent. So in other words, two-fifths of 1 percent. At the most siguro, one-half of 1 percent, 0.5 of 1 percent," Pernia said in a State of the Nation with Jessica Soho report by Ivan Mayrina.

Pernia attributed the rise in inflation rate on the surge of oil prices and the depreciation of peso.

"The bigger contributors are the series of increases in the price of oil in the world market and then 'yung ano rin, to some extent, 'yung depreciation of the peso," he said.

Inflation continued to move at a faster rate of 4.5 percent last April, according to the Philippine Statistics Authority (PSA).

Pernia has said inflation is expected to continue accelerating in the coming months, but this could slow down during the last three months of 2018.

According to an economist, some government policies also affect the increase of prices of some commodities similar to what is happening with the price of rice.

"Kasi nga hindi nag-import agad ng sapat ang NFA (National Food Authority) or ang gobyerno. Hindi hinayaan ang private sector kaagad na mag-import ng bigas," said Professor Victor Abola.

Inflation is among the key considerations of the Bangko Sentral ng Pilipinas (BSP) on whether it will tweak policy rates.

The policy-setting Monetary Board is scheduled to meet on May 10 to decide on the matter. — Anna Felicia Bajo/BAP, GMA News