MANILA, Philippines – New petitions to raise passenger jeepney fares may push inflation up if granted, central bank officials said, even as they reiterated consumer price increases would fall within target this year despite the possible adjustments.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr., in a text message last Friday, said new fare increases sought by a transport group “will tend to add to inflation,” which averaged 3.1 percent as of July.
“Even with these however, the direct effect would not result in a breach of the target,” he added.
“For 2012 to 2013, full-year inflation would remain within the three- to five-percent target,” the BSP chief said.
Inflation averaged 3.1 percent as of July, hitting BSP’s forecast for the year and within the lower-end of its three- to five-percent target for 2012 and 2013. Official inflation data for August will be released on Wednesday.
Last Thursday, a P2 adjustment on the first four kilometers – to P10 from the present P8 – was asked by the Alliance of Concerned Transport Organizations (ACTO) before the Land Transportation Franchising and Regulatory Board (LTFRB).
Arguing the recent spate of oil price hikes have trimmed jeepney drivers’ earnings, ACTO is also seeking a hike in charges for succeeding kilometers to P1.75 from P1.40. A provisional 50-centavo raise, which it wants granted immediately while waiting for the larger increase, has also been submitted.
The full impact of the fare hike applications, once approved, is still being studied, BSP assistant governor Cyd Amador said in a separate text message.
“We have initial runs of the potential impact but we would want to get firmer details on the petitions,” she explained, without elaborating.
According to the National Statistics Office, the transport group, which includes fare adjustments in passenger jeepneys, buses, and taxis, accounts for 7.8 percent of the monthly consumer price index that measures inflation.
This means that, compared to food price changes which have a weight of 39 percent, fare adjustments may have less of an effect to rise in consumer prices.
Amador argued there was “no specific assumption” on transport fare hike considered when the official inflation target was set two years ago when the Aquino administration took over.
Economic managers, she said, “looked at the balance of upside and downside risks to inflation.”
The inflation target is part of a set of macroeconomic goals drafted by the Development Budget and Coordinating Committee (DBCC), of which BSP is a member. These goals are targeted to be achieved up to 2016.