It was reported that in more than three years, this January is the first time that the inflation rose to 4 percent.
The Department of Finance said on Monday that the alleged profiteering by some scrupulous traders is to blame.
This is contrary to the first allegations of some experts that the inflation was a cause of the newly implemented TRAIN law.
The DOF said that the profiteering and the taking advantage of some scrupulous traders were to blame. They allegedly slapped on taxes on products that should have been exempted, especially if they were acquired before January 1, 2018.
Finance Undersecretary Karl Kendrick T. Chua detailed how these traders took advantage.
“The temporary inflation spike could also be attributed to the apparent profiteering by some traders, contrary to claims that this was caused by the implementation of the new tax reform law,”
He added that these traders imposed excessive price adjustments that weren’t necessary.
“Certain retailers selling old stocks they procured before the Jan. 1 effectivity of the TRAIN seemingly took advantage of this new law and imposed excessive price adjustments, which led to last month’s higher-than-expected inflation rate,”
Also according to Chua, the prices are expected to normalize once the markets adjust and the government is able to check any unwarranted price movements of basic goods.
“Prices are expected to normalize once the markets adjust and the government intensifies its monitoring campaign to check any unwarranted price movements of basic goods,”
Finance Secretary Carlos G. Dominguez III admitted that he already suspected unscrupulous businessmen that raised their prices without reason are the reason for the headline inflation.
“I have to look at the figures closely but I find it hard to believe that the implementation of the TRAIN Law, which went into effect on Jan. 1, 2018, had any significant effect on prices, unless, of course, merchants took advantage of the law and raised prices on old inventories,”