Philippines Reports March Inflation at 4.3 Percent

Consumer prices in the Philippines rose by 4.3% in March, the fastest since August 2014 and above the government’s target range for 2018, partly due to the double-digit jump in prices of “sin” products last month, according to the Philippine Statistics Authority.

Reacting to the latest inflation report, the Bangko Sentral ng Pilipinas finally hinted at acting against the accelerating pace of price increases, Inquirer.net reported.

BSP Governor Nestor Espenilla Jr., in a mobile phone message to reporters, said the Monetary Board—whose seven members meet every six weeks to determine the level of domestic interest rates, and consequently help manage the inflation rate—was tasked to “carefully evaluate the appropriateness of a measured policy response.”

This response, he said, was meant to “firmly anchor” inflation expectations to the central bank’s insistence that its targets for the rate of increases in the prices of basic goods and services” would continue to be met in 2018 and 2019.”

“There’s a pick-up in inflation that we recognize,” Espenilla said, adding that financial markets were already factoring this in their assumptions.

In the meantime, UK-based Oxford Economics said the headline inflation rate could hit seven-year high levels this year, such that the BSP would likely raise rates twice.

A report by the Philippine Statistics Authority on Thursday showed that the rate of increase in the prices of basic goods last month was faster than the 3.1% posted in March last year and the revised 3.8% in February. As such, nationwide inflation averaged 3.8% in the first quarter, near the upper end of the 2-4% target range for the year.

Based on data reflecting 2012 prices as base, inflation in March was the highest since 2013, as data before that year were not yet available. And using the old base of 2006 prices, last month’s inflation was 4.8%, the highest since the 4.9% in both July and August 2014.

In the National Capital Region, headline inflation rose 5.2% year-on-year in March, up from 3.9% a year ago and 4.7% a month ago, bringing the first quarter average to 4.8%, PSA data showed.

Prices of food and nonalcoholic beverages rose 5.9%; restaurant and miscellaneous goods and services, up 3%; housing, water, electricity, gas and other fuels, up 2.9%; furnishing, household equipment and routine maintenance of the house, up 2.7%; health, up 2.4%, and communication, up 0.3%.