INFLATION may have settled at 2.5% to 3.3% in January, driven by rising food and liquefied petroleum gas prices and a higher tax on tobacco products, according to the central bank.

“Moving forward, the BSP will continue to monitor evolving price trends to ensure that the monetary policy stance remains consistent with the mandate of maintaining price stability conducive to economic growth,” Bangko Sentral ng Pilipinas’ Department of Economic Research said in a statement on Friday.

Inflation could have been tempered by lower electricity rates in Metro Manila and rollbacks in fuel prices, it added.

Inflation stood at 2.5% in December and 4.4% in January 2019.

President Rodrigo R. Duterte signed into law a new sing tax measure that raised taxes on electronic cigarettes and alcohol products.

The measure increased the ad valorem tax to 22% from 20% for net retail prices of distilled spirits. From a specific tax of P23.40 per proof liter in 2019, rates have been adjusted to P42 per proof liter at the start of the year.

This will continue to increase to P47 per proof liter in 2021, P52 in 2022, P59 in 2023 and P66 in 2024.

The law also imposes a P50 per liter levy on all types of wines. The tax used to vary according to wine type, price and alcohol content.

The levy will increase by 6% every year starting Jan. on 1.

The tax on heated tobacco products was raised to P25 per pack and will continue to increase by 2.50 centavos yearly until 2023.

The Department of Energy earlier said a new set of excise taxes on petroleum products would be enforced as as part of the third and final tranche of the Tax Reform for Acceleration and Inclusion law.

The law’s final tranche allows for a P1 per kilo additional excise tax for household liquefied petroleum gas.

The Energy department has said 48 of 67 LPG depots have started imposing the additional taxes as of Jan. 24. Four out of 297 LPG refilling plants have also enforced the additional excise taxes since Jan. 10.

The Philippine Statistics Authority is set to release January inflation data on Feb. 5. — Luz Wendy T. Noble