Inflation speeds up to 3.4% in March, fastest in 2 years
CEBU, Philippines - Inflation continued to accelerate last month due to higher prices of food and utility, the government reported yesterday.
The consumer price index rose 3.4 percent in March, the fastest since November 2014, the National Economic and Development Authority said.
March inflation, however, was within government’s target for the year and the median market expectation of 3.4 percent for the month.
The Bangko Sentral ng Pilipinas has a 2-4 percent inflation target for 2017.
The first quarter of 2017 saw the Philippine’s inflation rate trending upwards, partly due to recent hikes in food and oil prices and also owing to a generally low base in 2016.
“Upward risks to inflation remain, but the overall outlook continues to be within government’s 2.0-4.0 percent target range for this year and next,” Socioeconomic Planning Chief Ernesto Pernia said in a statement yesterday.
Inflation in the non-food group rose 2.8 percent from 2.5 percent in February 2017, and from 0.4 percent in March 2016. This was mainly due to the faster year-on-year price adjustments of electricity, gas, and other fuels, which hiked to 9.3 percent.
“Higher electricity rates are expected to persist in the next two months as the Energy Regulation Commission (ERC) will spread the additional cost from the use of liquid fuel, which is more expensive than natural gas, until May 2017," he said.
Other sub-commodity groups that pushed inflation of non-food items upwards were furnishing, household equipment, and routine maintenance of the house at 2.5 percent from 2.3 percent, and health at 2.8 percent from 2.6 percent.
Meanwhile, inflation in the food group went down 4.2 percent in March 2017 from 4.3 percent in the previous month, due to slower price adjustments in fish, fruits, vegetables, sugar, jam, honey, chocolate, and confectionery, and other food products.
However, inflation in rice and meat rose to 2.3 percent and 3.2 percent, respectively, possibly due to importation constraints imposed by the government.
“Inflationary pressure may ease following the removal of quantitative restrictions (QR) on rice importation, and the timely augmentation of supplies. However, the likely recovery of international and petroleum prices in 2017 may keep consumer prices afloat,” Pernia said.
He added that possible adjustments in transportation fares and electricity rates in the coming months could exert upward pressure on prices.
The continued depreciation of the Philippine peso against the US dollar may exert upward push on the cost of basic commodities and services, NEDA said.
“The recent upward trend in inflation needs to be closely monitored. The government needs to implement timely mitigating measures to ensure that prices remain stable,” said Pernia. (FREEMAN)
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