Inflation rockets to 4.3% in March
Consumer prices rose 4.3 percent in March or above the government’s 2-4 percent target range for 2018 on the back of a double-digit jump in prices of “sin” products last month.
A Philippine Statistics Authority report released on Thursday showed that the rate of increase in prices of basic goods last month was faster than 3.1 percent a year ago, and 3.8 percent a month ago.
The headline inflation rate averaged 3.8 percent in the first quarter, near the upper end of the target range for the year.
The PSA report showed that among major commodity groups, prices of alcoholic beverages and tobacco rose the fastest in March, jumping 18.6 percent year-on-year.
Prices of food and non-alcoholic beverages increased 5.9 percent; restaurant and miscellaneous goods and services, up 3 percent; housing, water, electricity, gas and other fuels, up 2.9,; furnishing, household equipment and routine maintenance of the house, up 2.7 percent; health, up 2.4 percent; and communication, up 0.3 percent.
In its forecast released last Wednesday, the Department of Finance (DOF) blamed “tax issues” for the steep climb in prices of so-called “sin” products such as cigarettes and tobacco, partly referring to the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Act alongside the Sin Tax Reform Act of 2012.
Signed by President Rodrigo Duterte in December, Republic Act No. 10963 or the TRAIN Law has jacked up or slapped new excise taxes on cigarettes, oil, sugary drinks, and vehicles, among other goods, since January 1 this year to compensate for the restructured personal income tax regime that raised the tax-exempt cap to an annual salary of P250,000.
Under the TRAIN Law, the unitary excise tax slapped on cigarettes rose to P32.50 per pack effective January 1 from P30 a pack last year.
The TRAIN Law also mandated a further increase in the cigarette excise tax rates to P35 per pack from July 1, 2018 to Dec. 31, 2019; P37.50 a pack from January 1, 2020 to December 31, 2021; and P40 from January 1, 2022 to December 31, 2023.
Also, the excise taxes slapped on alcoholic drinks increased at the start of the year as mandated under the Sin Tax Reform Law.
The DOF had also blamed improved tax compliance by Mighty products, now owned by Japan Tobacco International, to have been pushing cigarette prices higher. /kga
