April 13 ----- Philippine headline inflation cooled in March to the slowest in six months, amid lower prices of food and transport, the statistics agency said.
However, core inflation, which excludes volatile food and fuel prices, accelerated to the fastest since December 2000. Preliminary data from the Philippine Statistics Authority (PSA) showed annual headline inflation eased to 7.6% from 8.6% in February, but much faster than the 4% print a year ago.
March inflation was the slowest print since the 6.9% print in September 2022. This is also below the 8.1% median from a Business World poll conducted last week. “The March 2023 inflation outturn of 7.6% is within the BSP’s (Bangko Sentral ng Pilipinas) forecast range of 7.4-8.2%, consistent with the overall assessment that inflation will remain elevated over the near term before gradually decelerating back to target range towards end-2023,” the central bank said in a statement.
Seasonally adjusted, inflation recorded zero percent monthly rate in March from 0.3% in February. For the first quarter, the consumer price index (CPI) averaged 8.3%, higher than the central bank’s full-year forecast of 6% and the 2-4% target band. Core inflation, on the other hand, quickened to 8% in March, from 7.8% in February and 2.2% a year ago. This is its highest clip since the 8.2% seen in December 2000. At a press briefing, PSA Undersecretary and National Statistician Claire Dennis S. Mapa said food and non-alcoholic beverages were the main source of the deceleration in March inflation.
The index for food and non-alcoholic beverages eased to 9.3% from 10.8% in the previous month. Food inflation alone decelerated to 9.5% in March from 11.1% in February. Mr. Mapa said the downtrend in food inflation was due to slower rise in prices of vegetables, tubers, plantains and cooking bananas (20% in February from 33.1% in February), meat and other parts of slaughtered land animals (4.6% from 6.5%), and sugar, confectionery and desserts (35.2% from 37%).
Price increases in oil and fats, as well as corn, also slowed during the month. However, higher annual increases were seen in rice, milk and other dairy products; fruits and nuts; and ready-made food products. The PSA also reported prices of housing, water, electricity, gas and other fuels, slowed to 7.6% in March from 8.6% in February. Transport inflation also decelerated to 5.3% in March, from 9% in February as pump prices declined.
For the month, pump price adjustments stood at a net decrease of P0.65 a liter for gasoline, P1.75 a liter for diesel, and P3.25 a liter for kerosene. Mr. Mapa said the PSA is currently monitoring global oil prices after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) recently announced an output cut of about 1.16 million barrels per day (bpd). Meanwhile, the inflation rate for the bottom 30% of income households eased to 8.8% in March from 9.7% in February. Still, this is higher than the 4.2% in March 2022.
Inflation in the National Capital Region also slowed to 7.8% in March, from 8.6% in February. Areas outside of NCR also saw inflation ease to 7.5% in March, from 8.5% in the prior month. National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said inflation must still be monitored and urgently addressed despite its slowdown.
“Protecting the purchasing power of Filipinos, especially the most vulnerable sectors of the economy, is one of the top priorities of the administration. We are committed to provide policy advice and anticipatory recommendations that are supported by data to manage inflation and protect the Filipino families,” Mr. Balisacan said in a statement.
Finance Secretary Benjamin E. Diokno said the March inflation number supports his view “that the monetary authorities have done enough to tame inflation with its 425bps policy rate increase.”
“The focus now should be on the supply side of the equation, of which the national government authorities play a bigger role… We remain focused on treating inflation as an immediate and long-term concern. We continue to monitor domestic and external developments to make sure that inflation remains on its downward path and that it eventually falls within the 2% to 4% target range,” Mr. Diokno said.
In a note, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said receding supply side pressures helped slow headline inflation, but second round effects resulted in faster increases for restaurants and personal services. Based on PSA data, the index for restaurant and accommodation services rose to 8.3% in March from 8.1% in February. Personal care and services also grew to 5.6% from 5.3% a month prior. Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said restaurants continued to increase their prices despite the slower rise in food costs.
With demand remaining strong, (restaurants) have the space to pass on the cost to consumers. It may take several months for restaurant inflation to go down from 8% to 4%,” Mr. Neri said in a note.
Source: bworldonline.com
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