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Adb Sees PH Inflation at 10-Year High: Ben O. de Vera @bendeverainq

The Asian Development Bank forecasts that inflation in the Philippines will hit 5.3% in 2018, which would be the highest rate in 10 years. This is an increase from their previous forecast of 5% inflation. High global oil prices and a new tax law have contributed to rising food and consumer prices. While inflation is expected to ease due to interest rate hikes, it will still exceed 4% for the full year 2018 and remain above the government's 2-4% target range. Looking ahead to 2019, inflation is projected to slow but remain at 4%.

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41 views

Adb Sees PH Inflation at 10-Year High: Ben O. de Vera @bendeverainq

The Asian Development Bank forecasts that inflation in the Philippines will hit 5.3% in 2018, which would be the highest rate in 10 years. This is an increase from their previous forecast of 5% inflation. High global oil prices and a new tax law have contributed to rising food and consumer prices. While inflation is expected to ease due to interest rate hikes, it will still exceed 4% for the full year 2018 and remain above the government's 2-4% target range. Looking ahead to 2019, inflation is projected to slow but remain at 4%.

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vADB sees PH inflation at

10-year high
By: Ben O. de Vera - Reporter / @bendeveraINQ
Philippine Daily Inquirer / 05:32 AM December 13, 2018

The Asian Development Bank sees inflation in the Philippines hitting a 10-year
high of 5.3 percent in 2018 even as the central bank’s aggressive interest rate
hikes in the past months were expected to ease consumer price increases in the
near term.

In its Asian Development Outlook Supplement December 2018 report released


yesterday, the Manila-based multilateral lender further jacked up its inflation
forecast for the Philippines from 5 percent in its report in September.

At 5.3 percent, it will be the highest annual headline inflation rate since the 8.2
percent posted in 2008, using 2012 prices as base, Philippine Statistics Authority
data showed.

It will also remain above the government’s target range of 2-4 percent.

The ADB noted that in recent months, “food prices rose significantly owing to
weak agricultural output and high global oil prices early in the year, and new
excise taxes contributed to inflation.” It was referring to the Tax Reform for
Acceleration and Inclusion Act.

“While inflation is expected to ease, the full-year average is still likely to exceed
the projection in (September)… The recent buildup in inflationary pressure
should moderate next year, with inflation still projected at 4 percent” or at the top
end of the government’s 2-4 percent target range for 2019, the ADB said.

“Tight monetary policy will kick in following a cumulative rate hike of 175 basis
points implemented from May to November,” it added.

Also, the ADB said elevated global oil prices and weaker currencies had
increased inflationary pressures not only in the Philippines but also in Laos and
Myanmar.

Recent heavy rains also damaged agricultural output, jacking up food prices in
the Philippines and Laos, the ADB said.
But moving forward, “oil prices continue to drop as supply outpaces
expectations, which reduces pressure on external balances in the region,
particularly in India and the Philippines.”

As such, the ADB kept its gross domestic product growth forecasts of 6.4
percent in 2018 and 6.7 percent in 2019, below government target ranges of 6.5-
6.9 percent this year and 7-8 percent.

The ADB was bullish on the robust infrastructure investments in the Philippines,
but noted its lagging agriculture sector.

“Infrastructure spending remained strong in Brunei Darussalam, Indonesia, the


Philippines and Thailand, but declined in Malaysia. On the production side,
Myanmar and Thailand benefited from improved agricultural output, which
languished in Indonesia, Laos, and the Philippines in the wake of natural
disasters and bad weather,” the ADB said.

Read more: https://business.inquirer.net/262135/adb-sees-ph-inflation-at-10-year-


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