LOWER POWER costs last month as well as steady food prices likely tempered the rise in prices of widely used goods in July, the Department of Finance (DoF) said.
“Inflation rate this month (July) is likely to moderate to 2.7% on the back of stable food prices. Year on year, power rates also declined,” Finance Undersecretary and chief economist Gil S. Beltran said in his latest economic bulletin.
“Continuing benign inflation will enable the economy to sustain rapid economic growth and hurdle volatilities in the world economy with relative ease,” he added.
If the estimate bears out, inflation would slow from June’s 2.8%, but remain higher than the 1.9% posted in July 2016.
It would also come in below the 2.85% median of a BusinessWorld poll of 10 economists.
The DoF expects prices of food and non-alcoholic beverages to have risen 3.5% in July, unchanged from a month earlier, but higher than the 2.7% in July 2016.
“In July, indices for alcoholic beverages and tobacco may have risen by 6.7% from 6.2% in June, health to 2.5% from 2.3%, and transport from 2.3% to 2.8%,” according to the economic bulletin.
Meanwhile, growth in prices of housing, utilities and fuels are thought to have slowed down to 1.7% from 2.1% in June; growth in prices of furnishings and household equipment may have eased to 2.0% from 2.1% previously, while those of communication may have dropped to 0.1% from 0.2%.
Prices of clothing and footwear, as well as of education, were likely steady from a month earlier, both estimated at 2.1%
The bulletin noted that Manila Electric Company’s (Meralco) rate per kilowatt hour (kWh) for July at the average 200 kilowatts-per-month consumption level declined to P8.25 from P8.61 a year earlier. It was higher than the P8.18 in June.
However the power distributor announced earlier a P0.0761-per-kilowatt-hour increase in the basic rate following June’s P1.43/kWh record cut. July’s P0.0799/kWh hike in generation charge was partly offset by a refund for 2014-2016 over-collections.
© Copyright 2016, BusinessWorld Publishing Corporation Electricians from the MERALCO maintain a secondary transmission line in Manila. -- AFP
“Finally, the average price of diesel in Metro Manila among the ‘big three’ oil companies increased to P30.13 per liter in July from P29.7 in the previous month, and P27.55 in July last year,” the DoF said.
Prices of gasoline in July “slightly dropped to P43.28 per liter from P43.6 in June, but higher compared to P39.88 a year before.”
Fuel retailers announced a P0.70 per liter increase in gasoline prices and P1.20/liter for diesel effective July 11 due to higher world crude prices, but this was followed by price rollbacks a week later. -- Elijah Joseph C. Tubayan