According to the Institute for Development and Econometric Analysis, Inc. (IDEA), the month of February recorded a 4.2 percent increase in prices, slightly slower than January's 4.3 percent, as the rise in prices of some commodities and services continue to decelerate, particularly of the housing and repairs (H&R) and the heavily weighted food, beverages, and tobacco (FBT). Annual growth rates of H&R and FBT indices in February slowed to 1.8 percent and 3.8 percent, respectively, from the previous month of 2.0 percent and 4.3 percent. Steady delivery of vegetables as well as favorable weather conditions for fishing helped drove prices down.
Furthermore, according to the Bangko Sentral ng Pilipinas (BSP), the waning typhoon related effects likewise caused declines in food price inflation. Offsetting these slowdowns, however, were increases in fuel, light, and water (FLW) and service indices to 11.0 percent and 5.6 percent, respectively, from 9.2 percent and 5.1 percent. Contributing to the uptick were higher electricity charges imposed in many regions, especially in the national capital region, due to tighter generation capacity, recovery of deferred adjustments and higher international gas prices.
Meanwhile, core inflation, which excludes selected food and energy items, rose to 3.6 percent from last month's 3.0 percent. Based on the IDEA forecast, inflation will be following an uptrend trend, peaking in the third quarter of this year to around 6 percent before slowly rolling back to levels of 45 percent. The global recovery will fuel much of this acceleration as demand continuously picks up. Other contributing factors seen are effects of the El Niño phenomenon, which is already tightening the agriculture supply, as well as the problematic power supply that is burdening production of businesses.
On the other hand, the Bureau of Internal Revenue failed to collect a little more than P1 billion of its P48.25 billion target for the month of February. However, BIR Commissioner Joel Tan? Torres remains optimistic that the said target will be achieved upon the influx of late payments from other offices, hence helping the bureau attain its target for the third straight month. Data from the Department of Finance (DOF) revealed that the ratio of tax collections to gross domestic product (GDP) slid to 12.8 percent last year from the 14.13 percent recorded in 2008. Problems in tax collection along with revenue eroding measures accounted for the inability of the tax collection agencies to meet the 14.4 percent target ratio. The tax effort of the BIR dropped to 9.8 percent in 2009 from 10.5 percent recorded a year earlier, while the Bureau of Customs’ tax effort fell to 2.9 percent from 3.5 percent.
Lastly, the Bangko Sentral ng Pilipinas (BSP) reported that the employment outlook index for the next quarter in the current quarter’s business expectations survey registered at 22 percent, surpassing the highest historical record for the index of 21.7 percent in the first quarter of 2008. BSP’s Department of Economic Statistics Director Rosabel Guerrero believes that this is another sign that the economy is recovering.
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