March inflation seen rising to 3.6%

MANILA, Philippines - Inflation likely accelerated to 3.6 percent in March due mainly to higher food, power and fuel prices, the Department of Finance said yesterday.

According to the latest economic bulletin prepared by DOF Undersecretary Gil Beltran, consumer prices may have picked up to 3.6 percent in March faster than the 3.3 percent recorded in February, and 1.1 percent in the same month last year.

It is also within the estimate of the Bangko Sentral ng Pilipinas at around three percent to 3.8 percent for March, as well as the two percent to four percent whole year target.

Beltran attributed the faster inflation to the normalization of global petroleum prices from low levels in 2016.

“Higher inflation is due primarily to base effects, as petroleum prices are normalizing from low levels set last year. Net of base effects, inflation should be three percent,” Beltran said.

Based on Beltran’s report, the DOF estimates that prices of food and non-alcoholic drinks in March may have gone up by 4.5 percent, higher than the 4.1 percent in February.

The DOF said the price increase of alcoholic drinks and tobacco may have also jumped to 6.5 percent from six percent.

Cost of housing, utilities and fuel are also seen to rise 4.1 percent in March from 2.9 percent in the previous month.

Prices of clothing and footwear are also seen to go up 2.9 percent, up from 2.8 percent in February. Health cost is also seen to pick up at 2.8 percent from 2.6 percent.

On the other hand, inflation for transport likely slowed down to 1.9 percent from 2.8 percent. Price increase in restaurants and other miscellaneous services also dropped to 1.8 percent from 2.1 percent.

Meanwhile, inflation for furnishings and household equipment (2.3 percent), recreation and culture (1.8 percent), education (1.8 percent), and communication (0.2 percent) are expected to remain steady.

Last month, Manila Electric Co. (Meralco) announced that its March rate increase for a typical household amounted to P0.66 per kilowatt hour, bringing overall rate to P9.67 per kWh from February’s P9 per kWh.

Overall generation charge also rose by P0.58 per kWh to P4.9 per kWh.

Beltran said the average price of diesel in Metro Manila among the big three oil companies, meanwhile, slightly decreased to P31.1 per liter from P31.3 per liter in the previous month. This is, however, higher than the P22.5 per liter charged in the same month in 2016.

Average price of gasoline during the month also dropped to P46 per liter from P47.7 in February, but higher than the P37.6 per liter in the same month last year.