BSP sees inflation slowing down in March

MANILA, Philippines — The Bangko Sentral ng Pilipinas expects inflation to slow down in March, giving consumers and businesses some measure of relief as the economy continues to recover from pandemic fallout.

In a statement on Friday, the central bank projected inflation would settle at 7.4-8.2% in March. If the upper range is realized, it would still mark the peak of inflation that policymakers and experts have been waiting for. 

“The recent rollback in domestic petroleum prices, lower prices of fruits and vegetables as well as the decline in chicken and sugar prices, are expected to contribute to easing price pressures during the month,” the statement read.

Inflation quickened to 8.6% year-on-year in February, amid persisting supply chain disruptions as the domestic economy fully reopened towards the end of 2022.

Zooming in, supply shortages remained to be a sore point for the economy as key food items such as sugar, onions and eggs posted significant price upticks. To plug the gaps, the Marcos Jr. administraiton resorted to importing some food items to arrest prices from accelerating further.

The economy still managed to expand despite its inflation woes. An explosion in consumer spending, especially during the holiday season, lifted its 7.6% annual gross domestic product in 2022.

That said, the BSP remained wary on certain price pressures that could upset their outlook. Higher electricity rates in Meralco areas as well as creeping prices of pork, fish, eggs, and rice remain. 

“Going forward, the BSP remains prepared to respond appropriately to continuing inflation risks in line with its data-dependent approach to monetary policy formulation,” the central bank added. — Ramon Royandoyan