Philippine inflation accelerated to a three-month high in January as higher taxes boosted prices of alcoholic beverages and tobacco, limiting the central bank’s scope to reduce interest rates further.
Consumer prices rose 3 percent from a year earlier, after a previously reported 2.9 percent advance in December, the National Statistics Office said in Manila today. The rate matched the median in a Bloomberg News survey of 17 economists.
“Inflation numbers will continue going up as economic growth strengthens,” Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo, said before the report. “This could limit the central bank’s ability to keep rates low.”
Bangko Sentral ng Pilipinas held its benchmark rate at a record-low last month while cutting rates on special deposit accounts to help curb capital inflows that boosted the peso and drove stocks to a record yesterday. Gross domestic product rose 6.8 percent in the fourth quarter from a year earlier.
The peso slipped 0.1 percent to 40.638 against the dollar at 9:11 a.m. in Manila, according to Tullett Prebon Plc.
The central bank cut its forecast for price gains this year to 3 percent from 3.1 percent. Governor Amando Tetangco said last month January’s inflation rate would account for the impact of higher excise taxes on tobacco and liquor products.
The core inflation rate was 3.6 percent in January, today’s release showed. Alcoholic beverages and tobacco costs rose 17.3 percent from a year earlier, compared with a 5.1 percent gain in December. Housing and fuel climbed 3.6 percent.