Wednesday, March 14, 2018

TRAIN is inflationary so PSA rebased the CPI to 2012=100

The TRAIN law is inflationary so when Philippines inflation rate has shown significant increase (3.3% in December 2017, 4.0% in January 2018, 4.5% in February 2018), the Philippine Statistics Authority (PSA) suddenly rebased the consumer price index (CPI) from 2016 = 100 to  2012 = 100.

Zero Hedge quickly noticed this on that day, February 06, 2018. It published,

"Philippines Changes Inflation Calculation After CPI Shows Overheating Economy"
by Tyler Durden
Tue, 03/06/2018 - 11:36

Tyler Durden wrote, "the country's latest CPI print showed that the economy was overheating - which would force the central bank to hike rates, something it has long resisted - the country had a radical solution: change how CPI is calculated."

This is abnormal, of course. Iwas-pusoy sila DOF-DBM-NEDA Dutertenomists. When they were peddling the TRAIN bill, they promised that it won't be inflationary, just mild uptick in prices. When TRAIN became a law, they realize that they could not hide the high inflation impact of their tax architecture, they were proven to be wrong, at worst dishonest. Hence, finding other ways to make the ugly and inflationary TRAIN to become "less ugly" and "less inflationary."

Compare how PH inflation rate in 2006 = 1000 vs 2012 = 100. Malinaw ang iwas-pusoy ng Dutertenomics. "Less inflationary" si 3.9% vs 4.5%.

Until January 2018 inflation report, PSA was using 2006=100.

Summary Inflation Report Consumer Price Index (2006=100): January 2018
Reference Number: 2018-023
Release Date: Tuesday, February 6, 2018

By February 2018 inflation report, PSA suddenly changed to 2012 = 100. Magaleeeng.

Summary Inflation Report Consumer Price Index (2012=100): February 2018
Reference Number: 2018-039
Release Date: Tuesday, March 6, 2018

Starting March 2018, the PSA will release the rebased CPI series as announced in the press release number 2018-031 dated 22 February 2018. Data users can expect two sets of the CPI as the new series shall be issued simultaneously with the 2006-based series until June 2018. The CPI series for July 2018 onwards shall be 2012-based.

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