SOCIOECONOMIC Planning Secretary Ernesto Pernia warned Wednesday that consumers may continue to pay higher electricity in the next two months as inflation in March climbed to 3.4 percent from 3.3 percent in the previous month.
Inflation increased due to higher prices of electricity, gas and other fuels, said National Economic and Development Authority, which is being headed by Pernia.
March inflation was the fastest since November 2014.
“Higher electricity rates are expected to persist in the next two months as the Energy Regulation Commission (ERC) will spread the additional cost from the use of liquid fuel, which is more expensive than natural gas, until May 2017,” Pernia said.
He noted that in March, faster year-on-year price adjustments of electricity, gas and other fuels were recorded, hitting 9.3 percent.
The hike was partly caused by a 20-day maintenance shutdown in the Malampaya Gas Field, shutting down three power plants—Ilijan, Sta. Rita, and San Lorenzo. The shift to liquid fuel from natural gas pushed up household electricity rate to P9.67 per kWh.
Other sub-commodity groups that pushed inflation of non-food items upwards were furnishing, household equipment, and routine maintenance of the house at 2.5 percent from 2.3 percent, and health at 2.8 percent from 2.6 percent.
Meanwhile, inflation in the food group decelerated to 4.2 percent in March from 4.3 percent in the previous month. This is due to slower price adjustments in fish, fruits, vegetables, sugar, jam, honey, chocolate, and confectionery, and other food products.
However, inflation in rice and meat accelerated to 2.3 percent and 3.2 percent, respectively. Both could be due to importation constraints imposed by the government.
“Inflationary pressure may ease following the removal of quantitative restrictions (QR) on rice importation, and the timely augmentation of supplies. However, the likely recovery of international and petroleum prices in 2017 may keep consumer prices afloat,” Pernia said.
He added that possible adjustments in transportation fares and electricity rates in the coming months could exert upward pressure on prices. The continued depreciation of the Philippine peso against the US dollar may exert upward push on the cost of basic commodities and services.
“The recent upward trend in inflation needs to be closely monitored. The government needs to implement timely mitigating measures to ensure that prices remain stable,” said Pernia. (SDR/VoxPop Philippines)