INFLATION – or the rate of increase in the prices of commodities – is unlikely to settle within the government’s target of 2 to 4 percent this year, according to research group IBON Foundation.
Citing the expected spike in global crude oil prices and the second round of additional excise taxes under the tax reform law, IBON Foundation executive director Jose Enrique Africa said inflation is expected to remain elevated in 2019.
“Ang inflation situation hindi bababa sa 2 to 4 percent. Imposible ‘yon,” Africa said in a news forum in Quezon City on Saturday.
Although inflation failed to settle within its target range, the administration’s economic managers earlier gave the assurance that it will fall within the 2 to 4 percent goal this year as inflation showed signs of easing in the last quarter of 2018 amid declining oil prices.
Inflation clocked in at 5.1 percent in December 2018 – a seven-month low. This is slower than the 6 percent rate posted in November but faster compared with the 2.9 percent recorded in December 2017.
The December inflation rate brings the full-year 2018 rate to 5.2 percent, hitting the upper end of the government’s revised forecast range of 4.8 percent to 5.2 percent but outside the target range of 2 to 4 percent.
“Nag-start na ulit tumaaas ang oil prices sa start ng 2019 kaya ang hirap isipin na with rising oil prices ay bababa pa ang inflation… Sabi ng OPEC [Organization of the Petroleum Exporting Countries] more or less $65 to $70 per barrel ang krudo sa 2019,” Africa said.
“Ibig sabihin ‘yung inaasahan na pagbaba ng inflation mahina ang tsansa… kasi mataas ang oil prices at may dagdag na buwis. Bottom line: Magiging mahal sa 2019 ang langis,” he added.
The Tax Reform for Acceleration and Inclusion (TRAIN) law imposed a P2.50 per liter excise tax on diesel, from zero, and hiked the levy on gasoline to P7.00 per liter on Jan. 1, 2018. The measure was signed into law by President Rodrigo Duterte in December 2017.
Under the tax reform law, fuel excise taxes will go up by P2.00 per liter starting Jan. 1, 2019. This means that the excise tax on diesel will go up to P4.50 per liter and on gasoline to P9.00 per liter.
The second round of excise tax increase on petroleum products officially took effect on Jan. 1, 2019, but the Department of Energy expects it to be reflected on fuel prices by the middle of this month. (GMA News)