August 2018 has recorded the highest inflation rate in nearly a decade.
Gas and oil prices, rice, meat, and vegetables saw great increase in their prices making it hard for consumers to buy more with meager budget.
Last Monday, September 10, Department of Finance Assistant Secretary Tony Lambino faced the media to discuss the primary drivers and contributors to the record high August 2018 inflation.
The former singer-anchor and Smokey Mountain member faced the press to discuss the August inflation and list down the top 10 causes of August inflation.
And to give people the idea what drives the high inflation rate, here are the top 10 main drivers that contribute to the 6.4% August 2018 inflation rate as discussed by Asec. Lambino.
10. Tobacco
Increase in tobacco price was brought about by the increase in excise tax through the Sin Tax law.
9. Non-alcoholic beverages
This includes soft drinks and sweetened beverages. Increase in its prices was primarily due to the increase in excise tax brought about by the TRAIN Law.
8. Catering Services
Another August 2018 inflation rate driver is the non-essential catering services. This includes eating out at restaurants and fast foods. With the enactment of TRAIN law which reduced the monthly income tax of employees and in effect increased their spending capability, fastfood and restaurants saw increase in sales which drives the increase in inflation rate.
7. Housing Rentals
The partial expiration of RA 9653 or Rent Control Act this year paved the way for the increase in household rentals in apartments which contributed to the increase in inflation.
6. Meat
Increase in meat prices was due to the increase in corn price, one of the main ingredients used in animal feed. Another contributor to the increase in meat price is the swine disease in China and Africa.
5. Vegetables
With the recent onslaught of typhoons and habagat which brought widespread flooding, prices of vegetable saw a big increase which in turn added to the high inflation rate.
4. Operation of private vehicles
As the price of gasoline and diesel increased due to increase in oil import prices, peso depreciation and partial effect of the TRAIN law, expenses in fuel consumption of private vehicles greatly increased resulting in the increase in inflation.
3. Rice
With the rice shortage happening in Mindanao, its price was greatly affected making it one of the top contributors to the August 2018 inflation.
2. Fish
Fish price increased is mainly brought by the tightening supply due to climate change and the Department of Agriculture’s restriction on commercial fishing vessels to fish in municipal waters.
1. Electricity, LPG and Kerosene
This is the top contributor to the August inflation. Its increases is primarily driven by the multiple rate increases due to power rate agreements and tariff increase request.
