Inflation expected to go down for the month of July

A few days before the official announcement of the July inflation rate, members of the government's economic team are already expecting a decline from the previous month's tally of of 5.2 percent.

"We expect inflation to start tapering off second half of the year and it will go back to normal in 2019," Department of Budget and Management Secretary Bejamin Diokno said.

Department of Trade and Industry Undersecretary Ruth Castelo is also looking forward to a lower inflation figure for the month of July which will be formally announced on Monday.

"Inflation rate is expected to normalize by end of 2018 but it is also expected to go down a little bit for the month of July," Castelo said.

Inflation was posted at 5.2 percent in June, a big jump from the inflation rate recorded since the start of the year when the Tax Reform for Acceleration and Inclusion (TRAIN) Act took effect.

Castelo said further measures were implemented by the government aside from the unconditional cash transfer that stand to benefit some 10 million Filipinos.  

"Government gave free education as a mitigating measure starting June this year. Hindi kasama sa computation ng inflation rate for June," she explained. 

Meanwhile Diokno said the surge in the international prices of oil coupled with a weaker peso may have pushed the inflation rate higher in the first half of the year.

However, things are taking a different turn at the second half of the year, he said.

"Although erratic pa rin ang price ng oil pero ang expectation namin bababa talaga ang price of oil. Kasama rin 'yun exchange rate, hindi niyo napapansin bumababa na rin 'yung exchange rate," Diokno explained. 

While TRAIN Law may have put pressure on some prices of commodities, Diokno would rather look at the other side of the coin with 99 percent of income tax filers benefiting from the tax reform law by putting more money inside the pockets of individuals.

"Our rough estimate is that TRAIN has increased your budget take home pay equivalent to one month salary," Diokno said.

"We are in a very nice place. Right now we are one of the fastest growing countries," he said. —KG, GMA News