The Philippine Statistics Authority (PSA) reported recently that inflation, or the rates of increase in the price of consumer goods and services, further eased in March this year due to slower upticks in food and transport costs.
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In a press release, PSA chief Dennis Mapa said that the country’s headline inflation recorded 7.6 percent year-on-year in March compared to 8.6 percent in February. This drop is the slowest inflation seen in six months since the 6.9 percent print in September last year.
“The downtrend in overall inflation in March was mainly due to the slower increase in prices of food and non-alcoholic beverages, which had a lower inflation rate of 9.3 percent last month from 10.8 percent in February,” Mapa was quoted as saying.
He adds that the transport commodity group also contributed to a downtrend in overall inflation with 5.3 percent in March, lower than the nine percent recorded in February.
The latest inflation figure, however, is still faster than the four percent rate recorded for the same month last year.
Lower inflation of 7.6% within forecast range
In a related development, the Bangko Sentral ng Pilipinas (BSP) issued a similar advisory stating that the country’s headline inflation of 7.6 percent is within the central bank’s forecast range of 7.4-8.2 percent for the month.
The resulting year-to-date average of 8.3 percent, however, is above the Philippine government’s average inflation target range of 2.0-4.0 percent for the year.
In contrast, core inflation, which does not include selected volatile food and energy items to depict underlying demand-side price pressures, rose to 8.0 percent in March from 7.8 percent in February.
On a month-on-month seasonally adjusted basis, inflation was nil in March from 0.3 percent in the previous month.
The latest inflation figure remains consistent with the BSP’s assessment that inflation will remain elevated in the near term but gradually revert towards the target range in end-2023. Nevertheless, the risks to the inflation outlook continue to lean towards the upside for both 2023 and 2024.
Inflation for food items eased in March
According to the BSP, headline inflation has declined due largely to lower inflation for food and energy-related items in the CPI basket.
Inflation for food items eased during the month with improvements in the domestic supply of key food commodities, particularly for vegetables, meat, and sugar.
Likewise, transport inflation decelerated further in March, reflecting the rollbacks in petroleum pump prices following the decline in global crude oil prices. Other commodity groups with lower inflation in March compared to February were health, and information and communication.
Similarly, inflation for electricity, gas, and other fuels also fell during the month.
Going forward, the Philippine central bank says it remains vigilant against inflation risks over the policy horizon and is prepared to adjust its monetary policy settings as needed in line with its price stability mandate.