Philippines: Inflation impact of new tax law minimal, says DOF

  • The newly enacted tax reform law may raise inflation by 0.7% in the first year of its implementation due to higher oil prices, a level which is considered “minimal and manageable,” according to the Department of Finance (DOF).
  • Finance Undersecretary Karl Kendrick Chua said TRAIN’s impact on inflation may taper off over time.
  • Broken down, Chua said TRAIN may raise food inflation by 0.3%, and transportation costs by 0.1%. Price increases of other commodities are also expected to accelerate by 0.3%. According to Chua, the DOF’s inflation estimate is supported by historical trends.
  • “Between Jan 16 and Jan 17, diesel prices were up by almost PHP14, which is equivalent to an increase of 76%. However, inflation remained stable (2.7%), and food, transportation, and electricity, gas, housing, and water did not increase significantly,” he said.

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