MANILA-- Faster rate of price increases of food and oil in general are seen to further push domestic inflation rate in the Philippines to 3.6 percent in March, a Department of Finance (DOF official said.
Finance Undersecretary and chief economist Gil Beltran, in his report to DOF Secretary Carlos Dominguez III, said normalization of oil prices from its record-low levels last year is the main factor for the uptick in domestic inflation rate this year.
In February, the country's inflation rose to 3.3 percent from January's 2.7 percent, bringing the average in the first two months this year to three percent, the middle of the central bank's inflation target range of 2 to 4 percent.
Oil prices went down to around USD40 per barrel in the early 2016 due to oversupply but it has so far gone up to a little over USD50 per barrel as major oil producers cut supply to address the low oil price environment.
This development made Beltran consider the faster inflation rate in the third month of 2016, with the food and non-alcoholic beverages sub-index seen to rise to 4.5 percent from 4.1 percent last February. Year-ago level for his index is 1.6 percent.
Housing, utilities and fuels index is also seen to register an increase to 4.1 percent from month-ago's 2.9 percent.
Core inflation, which exclude volatile items namely food and oil, rose to 2.7 percent last February from month ago's 2.6 percent and year ago's 1.6 percent as oil prices continue its climb.
Other sub-indices forecast to post increases are alcoholic beverages and tobacco, from six percent last February to 6.5 percent in March; clothing and footwear, from 2.8 to 2.9 percent; and health, from 2.6 to 2.8 percent.
Beltran however, sees lower contribution of the transport index for the third month this year to 1.9 percent from last February's 2.8 percent mainly due to lower oil prices last March in particular from last February's level.
The restaurant and miscellaneous services sub-index is also seen to post a slower growth of 1.8 percent from month-ago's 2.1 percent.
Inflation of the communication index is seen to remain flat at 0.2 percent and the recreation and culture and education indices both at 1.8 percent.
The Philippine Statistics Authority (PSA is scheduled to release the March 2017 inflation report on Wednesday.
Source: Philippines News Agency