DOF Economic Bulletin on Inflation Forecast
· Inflation in June likely inched up to 4.9% year-on-year (YOY), up from the previous month's 4.6% due to base effects and 0.35% month-on-month (MOM) increase. Note that the June 2017 inflation rate was low at 2.5% YOY and zero MOM.
· Month-on-month inflation adjustment may be due mainly to two items---2.43% MOM rise in education during the opening of classes and 2.27% rise in vegetable prices that usually accompanies incessant rains at the onset of the wet season.
· Food prices contributed to the YOY uptick mainly due to vegetables while MOM inflation of fish and rice price moderated to 0.11% and 0.1%, respectively.
· Price increase from sin products continues to be double digit YOY even as the MOM rate plunged to 0.3% from 0.81%
last May. For the June inflation rate, sin products contribute as much as 0.46 ppts. YOY.
· Non-food price also sees 0.33% month-on-month increase, driven by education and petroleum products but tempered by the decline in electricity rates. The P0.90-P1/li price rollback last June 25 likely came after the survey.
Table 1 Inflation Outlook for June 2018 by Commodity
Inflation Rate (%)
Contribution to Inflation
(ppts) Month-on-Month (%)
Commodity Group Jun-
17 May-
18 Jun-18 Jun-17 May-18 Jun-18 Mar-18 Apr-18 May-18 Jun- 18 All items
2.4 9
4.5 9
4.9 4
2.49
4.5 9
4.9 4
0.5 2
0.5
2 -
0.3 5 Food and non-alcoholic
beverages 3.0
4 5.75
5.6
0 1.20
2.28
2.23
0.50
0.41
(0.0
8) 0.2
9
Rice 1.22
4.3
7 4.17
0.12
0.44
0.42
0.76
0.66
0.12
0.11
Fish 7.73
11.36
10.6
1 0.45
0.6
8 0.64
- 0.92
(1.30
) 0.0
1
Vegetables 0.5
5 7.0
3 7.4
9 0.02
0.21
0.22
(2.01
) (0.9
5) (0.74
) 2.27
Non-alcoholic beverages 0.9
4 9.8
1 10.15
0.03
0.27
0.28
3.16
2.19
0.51
0.3
0 Alcoholic beverages and 7.0 20.5 20.4 0.15 0.46 0.46 2.39 1.31 0.8 0.3
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Tobacco 5 4 4 1 0
Alcoholic Beverages
3.3 9
5.4 7
5.7 6
0.03
0.0 4
0.04
0.9 0
0.22
0.3 7
0.3 5 Tobacco
9.0 9
28.2 9
27.8
2 0.13
0.42
0.41
3.06
1.87
0.9 4
0.2 5 NON-FOOD
2.0 4
3.2 3
3.8
9 1.54
1.88
2.25
0.55
0.45
0.0 9
0.3 3 Clothing and footwear
2.6 0
2.19
2.19
0.08
0.07
0.07
0.17
0.26
0.17
0.1 8 Housing, Utilities & Fuels 1.84
3.0
0 4.51
0.39
0.64
0.94
0.83
0.55
(0.18
) 0.14
Electricity, Gas & Other
Fuels 3.0
7 4.6
9 9.3
7 0.19
0.31
0.59
2.21
1.67 (0.87
) 0.1
0 Furnishings, household
equipment 2.18
2.9
4 3.0
3 0.07
0.0
9 0.36
0.61
0.26
0.17
0.1
8
Health 2.8
4 2.77
2.7
0 0.11 0.11 0.11 0.44
0.35
0.0
9 0.2
0
Transport 3.6
0 6.21
6.9
0 0.25
0.44
0.49
(0.2
9) 0.78
0.9
7 0.2
3
Communication 0.2
0 0.3
0 0.3
4 0.01
0.01
0.01
0.10
- - 0.0 4 Recreation and Culture
1.01
1.46
1.27
0.01
0.0 2
0.02
0.0 9
0.0 9
0.0 9
0.0 9 Education
2.0 5
1.78
2.6 9
0.07
0.0 6
0.10
- - -
2.4 3 Restaurants & Misc. Services
1.58
3.6 8
3.5 6
0.20
0.45
0.44
0.63
0.36
0.3 6
0.2 5
Table 2 Prices of Selected Commodities
Jun-17 May-18 Jun-18
Meralco rate per kWH for 200KW/mo consumption 8.18 10.00 9.88
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Meralco Generation Charge per kWH 3.86 5.05 4.98 Meralco Transmission Charge per kWH 0.74 0.86 0.78
Diesel (PHP/litre), NCR 29.72 46.19 46.91
Gasoline, RON 95 (PHP/litre), NCR 43.58 56.99 57.84
Sources of basic data: Meralco, DOE
