Fuel tax suspension to have little impact on inflation — BSP
It’s not a prime mover as one would expect.
Suspending the next round of fuel tax hikes would reduce 2019 inflation by 0.2 percentage points, according to estimates made by the Bangko Sentral ng Pilipinas (BSP).
It’s quite muted, but can still be wiped out if world crude prices remain elevated.
Economic managers of President Rodrigo Duterte have suggested that the P2 per liter increase set to kick in 2019 should be held off as global oil prices remain elevated. However, the P2.50/liter additional tax introduced since January 2018 stays.
It’s really the rice tariffication which will bring inflation back to below four percent, as it is seen to reduce overall prices by 0.7 percentage points, the BSP added.