Inflation reaches highest rate in 5 years

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Metro Manila (CNN Philippines, June 5) — Inflation rate rose to 4.6 percent in May from a year ago, the highest level in five years, the Philippine Statistics Authority announced Tuesday.

The rate is higher than the 4.5 percent inflation rate posted in April from the same period a year ago, and 2.9 percent in May 2017, the PSA said. It is, however, is at the lower end of the central bank's forecast rate for May of 4.6 percent to 5.4 percent.

President Rodrigo Duterte's economic managers said the increase was primarily driven by higher prices of rice, corn, fish, alcohol and tobacco, and personal transport prices, with international oil prices contributing 0.5 percentage points to the overall inflation rate in May.

A joint statement issued by Finance Secretary Carlos Dominguez, Budget Secretary Ben Diokno, and Socioeconomic Planning Secretary Ernesto Pernia said the government "is closely monitoring and taking steps to address the difficulties experienced by Filipino families today arising from higher prices."

"There might be some rise in inflation but we are sure this will taper off later in the year and will normalize in 2019," Budget Secretary Benjamin Diokno said.

Finance Secretary Carlos Dominguez assured the public that inflation would not be a deterrent to the economic team's efforts to reform the country's socio-economic structure towards an inclusive society.

The government this year implemented the first of package of its comprehensive tax reform program and there are proposals in Congress to suspend the higher excise taxes on fuels to ease prices and alleviate the burden on the poor.

"The 4.6 percent in May of 2018 cannot hinder us from our objective," Dominguez added.

Data from the National Economic Development Authority showed fish and seafood prices contributed 0.65 percentage points to the 4.6 percent inflation rate while fuel consisted of .60 percent and bread and cereals .56 percentage points.

For the annual difference in prices, PSA's data showed alcoholic beverages and tobacco saw a 20.5 percent hike followed by transportation with 6.2 percent.

PSA noted however, that inflation in Metro Manila was much lower compared to last month and May the previous year.

"Inflation in NCR (National Capital Region) was, however, slower at 4.9 percent in May 2018. In the previous month, inflation was noted at 5.2 percent and in May 2017, 3.8 percent," PSA's report stated.

Meanwhile, regions outside NCR posted a 4.6 inflation rate, higher than the initial projection of 4.3 percent. The Bicol Region bore the brunt of price increases.

"Thirteen regions exhibited higher annual increments during the month. The highest annual rate of 6.4 percent was observed in Region V (Bicol Region) while the lowest at 2.6 percent was seen in Region III (Central Luzon)," the report said.