DOF Economic Bulletin on Inflation
DOF Economic Bulletin on Inflation for February 2018
 
March 7, 2018 
Inflation rose to 4.5% (using 2006 as base year) in February 2018 from 3.95% in January 2017. This is 0.55 percentage point higher than in the previous month.
 
The biggest increases came from:
 
1.         Food and non-alcoholic beverages---by 0.16 percentage point. 
 
Of food items, the biggest increases came from:
 
a.   Rice--- by 0.12 percentage point as rice prices rose by 2.8% in February from 1.5% last month– This is due to NFA’s withholding of rice supply from commercial outlets thus leaving consumers to purchase higher-priced commercial rice.
 
b.    Non-alcoholic beverages--- by 0.03 percentage point as prices rose from 2.8% to 4.8% – This is due to the tax on sugar-sweetened beverages. 
 
2.         Alcoholic beverages and tobacco ---by 0.09 percentage point as this commodity group raised prices by 16.9%  (from 12.2% in January) due to the 4% sin tax adjustment and improved tax compliance by a major producer.
 
3.         Non-food items---by 0.27 percentage point. 
 
a. The biggest item, restaurants and miscellaneous services, rose by 0.24 percentage point as restaurants adjusted prices due to higher prices of food inputs including sugar-sweetened beverages.
 
b. Transport also pushed up the index by 0.10 percentage point as private transport fuel rose by 7.2%.  
Transport fuel price adjustments were due primarily to higher world prices of petroleum products. Only a little less than 10% could be attributed to excise tax adjustment under TRAIN.
 
World petroleum prices rose to US$63/barrel in January-February 2018 from US$53.5/barrel the year before, an 18% increase. Add to this the 2.6% exchange rate depreciation in January and February (from P49.85/US$ to P50.5) and the total adjustment should be 20.8% vs. 7.2% actual adjustment. 
 
Inflation was caused mainly by rice, restaurant charges due to sugar-sweetened beverages and fuels and transport, due to the 18% rise in world prices. 
 
Table 1: Inflation Rate by Commodity Group
 
Commodity Group
Weight
Jan-00
 
Rise in
in CPI
 
Feb CPI
 2006 base
Feb-18
MOM
 All items
100
3.95
4.48
0.53
FOOD & NON-ALCOHOLIC BEVERAGES
38.98
4.47
4.89
0.16
 Rice
8.92
1.47
2.77
0.12
 Corn
0.67
8.60
10.40
0.01
 Meat
6.97
6.20
6.70
0.03
 Vegetables
3.19
1.80
2.60
0.03
 Non-alcoholic beverages
2.69
2.84
3.90
0.03
 Fish
5.83
12.35
11.22
-0.07
ALCOHOLIC BEVERAGES & TOBACCO
2.00
12.17
16.85
0.09
 Alcoholic Beverages
1.01
5.10
5.80
0.01
 Tobacco
0.99
17.40
24.84
0.07
 NON-FOOD
58.99
3.10
3.50
0.27
 Clothing and footwear
2.95
1.94
2.00
0.00
 Housing, Utilities & Fuels
22.47
2.77
2.64
-0.03
 Electricity, Gas & Other Fuels
7.07
7.20
6.20
-0.07
 Furnishings, household equipment
3.22
2.15
2.51
0.01
 Health
2.99
2.06
2.60
0.02
 Transport
7.81
4.54
5.76
0.10
 Communication
2.26
0.30
0.40
0.00
 Recreation and Culture
1.93
1.46
1.50
0.00
 Education
3.36
2.30
2.20
0.00
 Restaurants & Misc. Services
12.03
2.20
4.20
0.24
 Core 
 
3.90
4.40
 
Source of Basic Data: PSA