Inflation hits 3.2 percent in 2017

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Metro Manila (CNN Philippines, January 6) Inflation rose to 3.2 percent in 2017, the government announced Friday.

It was the highest in three years, after inflation averaged at 1.8 percent in 2016 and 1.4 percent in 2015.

However, the Bangko Sentral ng Pilipinas (BSP) said the rise is still "well within the government's target range," which is 2 to 4 percent.

Inflation in December landed at 3.3 percent, given higher prices for some food items like rice, meat, fish, and fruit, as well as alcohol and tobacco. This was counterbalanced by lower prices in electricity, fuel, housing, transport, and water.

"The December 2017 inflation continues to affirm the BSP's assessment of a manageable inflation environment over the police horizon," the BSP said.

The central bank, which is tasked with maintaining price stability, also assured it would "remain vigilant against any risks to the inflation outlook."

The inflation rate comes just before the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law. The first package of President Rodrigo Duterte's tax reform program promises lower income tax, but higher excise taxes on fuel and sugar-sweetened beverages.

Critics of the law slammed it as anti-poor, as the additional excise taxes are projected to jack up prices of basic commodities.

Related: Trade chief: Effect of tax reform on basic goods' prices 'minimal'

However, National Economic and Development Authority Director-General Ernesto Pernia said inflationary effects could be mediated through tariffs on rice, strengthening the resiliency of farmers, and building new infrastructure.

"We see inflation over the near-term to remain stable despite pressures that may be brought about by the newly enacted TRAIN program, weather patterns, and uncertainties in international oil markets," Pernia said.

The Department of Finance also announced it predicts inflation will be "manageable." It even projected economic growth of at least 7 percent.

"Solid fundamentals backed by TRAIN 1 implementation, rice sector reform and the 'Build, Build, Build' policy will push the country's growth to 7-8 percent this year and sustain manageable inflation," Finance Undersecretary Gil Beltran said.

In the last decade, inflation hit its highest points at 8.3 percent in 2008, 4.6 percent in 2011, and 4.2 percent in 2009.