This March 26, 2020 photo shows Farmers Market in Cubao, Quezon City.
The STAR/Boy Santos
Plunging oil costs, price freeze to slow inflation in March
Prinz Magtulis (Philstar.com) - March 31, 2020 - 9:17am

MANILA, Philippines — Declining oil prices likely slowed inflation in March, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said Tuesday.

The central bank’s Department of Economic Research projects consumer prices rose 2.4% this month, slower than the 2.6% notched in February and settling within the low-end of BSP’s annual 2-4% target.

Even if the on-point projection is not hit, Diokno said inflation may settle anywhere within 2 to 2.8% range this month.

“The downward adjustment in prices for March was largely due to the plunging world oil prices,” Diokno said in a series of tweets.

Dwindling demand due to the coronavirus impact on economic activity pulled down Dubai crude prices— the Asian benchmark for global oil prices— to $22.51 per barrel, a level not seen since 2016.

Since the Philippines imports around 80% of its oil needs a year, plunging global oil prices help lower import costs for oil firms, which in turn prompt them to lower retail prices.

Apart from oil which serves as a crucial raw material from transport to factory activity, Diokno said food prices have also remained steady despite reports of shortage in some areas affected by the month-long Luzon community quarantine.

“In addition, food prices remained stable due to ample supply and favourable weather, and in the second half of March, the price freeze imposed by government on basic commodities,” the BSP chief said.

Decelerating inflation is giving BSP more leeway to ease policy and pump more cash to the economy, a decision it already made several times over the pst two weeks as the government scrambled to raise fund for coronavirus disease-2019 (COVID-19) response.

Apart from slashing key rates by 50 basis points last March 19, BSP also purchased P300 billion in Treasury bonds from the government on Monday, with no interest charged on the papers.

Diokno, with blessing from his colleagues at the policymaking Monetary Board, also cut bank reserve requirements by 200 bps starting March 30 to free up around P200 billion for lending.

BANGKO SENTRAL NG PILIPINAS BENJAMIN DIOKNO INFLATION
As It Happens
LATEST UPDATE: May 5, 2020 - 9:25am

The growth of prices of goods and services peaked at 6.7 percent in August this year—the highest inflation rate in nine years.

Metro Manila also suffered from staggering 7-percent inflation last month, forcing Filipino consumers to tighten belts even further.

Inflation has continuously climbed for eight straight months since January this year as President Rodrigo Duterte signed the TRAIN law, or the Tax Reform for Acceleration and Inclusion.

The Philippines' inflation rate is the highest in Southeast Asia. The inflation rate breached economic managers' earlier hoped-for ceiling of 4 percent.

May 5, 2020 - 9:25am

Headline inflation eases to 2.2% in April, the first month of the enhanced community quarantine in several areas due to the COVID-19 pandemic.

According to the Philippine Statistics Authority, the year-to-date inflation for this year slowed down to 2.6%, which is lower than April 2019's inflation at 3.0%.

The latest inflation rate is the slowest in five months since last November's 1.3%.

 

 

January 7, 2020 - 9:10am

Headline inflation increased by 2.5% in December 2019, the Philippine Statistics Authority says in a briefing. 

"This brings the annual average inflation for 2019 to 2.5%," it also says.

Headline inflation rose to 1.3% in November 2019 after bottoming to a 43-month low of 0.8% in October.

The government's target inflation range for 2019 was 2-4%.

October 4, 2019 - 9:16am

Headline, or total, inflation at the national level in September was at its lowest since June 2016 at 0.9%, the Philippine Statistics Authority days.

Headline inflation in June 2016 was at 1.3%

"The slowdown of the September 2019 inflation was also brought about by the slower annual rate in housing, water, electricity, gas, and other fuels," PSA also says.

September 5, 2019 - 9:17am

The Philippines' headline inflation slowed further to 1.7 percent in August, the Philippine Statistics Authority says in a briefing.

It adds this is the lowest since October 2016, when inflation was at 1.8 percent.

PSA also says that the top contributor to overall inflation for August was the Restaurant and Miscellaneous Goods and Services commodity group, "which recorded an annual rate of 3.2 percent."

"The share of this commodity group to the overall inflation was 24.5 percent," PSA also says.

August 6, 2019 - 9:15am

The country's headline, or total, inflation eased to 2.4% in July, the Philippine Statistics Authority says in a press briefing, down further from 2.7% recorded in June. 

The PSA says inflation in July was the lowest since January 2017. "It was the same rate observed in July 2017," the statistics authority also says.

The July rate brings year-to-date inflation in 2019 to 3.3%.

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