ADB: The annual PH inflation will reach a 6-year high of 4.3% in 2018

INQUIRING PHOTO / JAM STA ROSA

The Asian Development Bank estimates that consumer prices will remain high for the rest of the year, so that inflation is expected to average 4, At least 3% in six years. In its July 2018 report on the Asia Development Outlook released in July 2018, the multilateral lender in Manila raised its 2018 inflation outlook for the Philippines by 4% in the previous Development Outlook Report. Asia last April.

compare, inflation averaged 2.9 percent last year, 1.3 percent in 2016, 0.7 percent in 2015, 3.6 percent in 2014 and 2, 6 per cent in 2013, based on 2012 prices.

"Inflation in the Philippines largely driven by higher prices for fuel and related items and sporadic shortages of key food items. oil, the depreciation of the peso and strong domestic demand to prompt this supplement to revise the inflation forecast for 2018, "explained the ADB.

The overall inflation last month hit a new high in five years so the first half rate was 4.3%, already exceeding the target range of 2-4% for the first half of the year. set of the year.

"Higher excise tax on fuel and certain products under the law on tax reform that took effect in January 2018, are contributing factors," said the ADB, referring to the TRAIN Act

Signed by President Duterte in December, the TRAIN Act or the Republic Act No. 10963 since January 1 of this year imposed new excise duties on cigarettes, sweetened beverages , petroleum products and vehicles, among others, to offset the restructured personal income tax system that raised the tax-exempt cap to an annual salary of 50,000 P2. Bangko Sentral's monetary board np Pilipinas has already raised the key rate to 3.5% or 25 basis points each in May and June.

For next year, the ADB has maintained its forecast of 39%. inflation "The reform of the tax system on inflation should be transitional and normalize in 2019. "

" Arguments in favor of maintaining the inflation forecast for 2019 are upward adjustments of the anticipated key rates in line with the tightening of the global monetary policy ".

BSP rose again at its next political meeting in August.

Earlier this month, economic managers admitted that inflation would exceed the upper limit of the government's target for 2018, so that they adopt BSPs. forecast of 4-4.5 percent for the entire year.

While keeping the inflation target of 2-4 percent for the period 2018-2020, the Cabinet-level Development Budget Coordination Committee (DBCC) increased their projected rate of Commodity prices for this year compared to the previous forecast of 2-4% at their previous meeting in April.

For the period 2019-2022, the annual inflation forecasts have been maintained at the Economic Director's expectation nevertheless that the rate of increase in commodity prices will decrease in the second half of the year, because world oil prices and local rice prices are expected to stabilize towards the end of the year.

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