MANILA: The recent rebound in oil prices probably translated into higher transport costs, pushing inflation to a 17-month high in August, the Department of Finance said yesterday. Consumer prices, as measured by the consumer price index, likely went up two percent last month, inching up from July’s 1.9 percent and was the fastest since 2.2 percent in April last year. However, the figure, if realized, would still fall at the low-end of the government’s two- to four-percent target for the year. Inflation hit 1.9 percent for the first seven months.
“The benign inflation outlook for the rest of the year will give macroeconomic policymakers room for maneuver in responding to external shocks…,” Finance Undersecretary Gil Beltran said in a statement. “(It will also) enable them to support robust growth for the rest of the year,” he said.
According to Beltran, slightly higher prices could have come from a reversal of declining prices recorded by the transport and housing, utilities and fuels sub-indices. Specifically, the former could have recorded a 0.3 percent uptick from a deflation of 0.1 percent the previous month, while the latter may have risen 0.1 percent from negative 0.2 percent. As of Aug. 30, diesel prices have recorded a net increase of P2.49 per liter, while gasoline posted P4.93, data from the Department of Energy showed.
This was up from just P0.94 per liter for diesel and P4.28 per liter for gasoline by July 26 monitoring. Cooking gas prices, meanwhile, declined to P8.48 per kilogram. Offsetting the oil increase last month could come from lower electricity rates as power distributor Manila Electric Co. decrease its charges by P0.11 per kilowatt hour. The decrease was on account of better power supply.
“The projected manageable uptick in the growth of consumer prices will continue to boost domestic demand as well as counterbalance weaker global-growth outlook,” Beltran said. Economic growth, as measured by gross domestic product, accelerated to seven percent in the second quarter, the fastest in three years.
This brought the first-half expansion to 6.9 percent, which was at the high-end of the lowered target of six- to seven-percent this year. “Headline inflation is expected to remain benign in the near future and thus help further boost the country’s economy,” he said.
