The inflation rate in March 2019 further eased to a 15-month low of 3.3 percent from 3.8 percent a month ago on slower annual increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said Friday.
The March figure brought the average inflation in the first quarter to 3.8 percent, now within the government’s official target range of 2 percent to 4 percent for the year.
The March inflation was the slowest since 2.9 percent in December 2017. It was significantly slower than 4.3 percent in March last year and within the 3.1 percent to 3.9 percent range projected by the Bangko Sentral ng Pilipinas’ Department of Economic Research a week ago.
“The downtrend was primarily due to slower annual increase in the index of the heavily-weighted food and non-alcoholic beverages at 3.4 percent,” the PSA said.
It said annual rates also decelerated in the indices of alcoholic beverages and tobacco, 10.8 percent; housing, water, electricity, gas, and other fuels, and furnishing, household equipment and routine maintenance of the house, both at 3.4 percent; health, 3.9 percent; communication, 0.3 percent; and restaurant and miscellaneous goods and services, 3.7 percent.
Bangko Sentral ng Pilipinas said the latest data was consistent with its expectations that inflation would continue to settle within the target range for 2019 and 2020.
“However, the possibility of a stronger and prolonged El Niño episode together with the continued rise in global crude oil prices provide upside price pressures over the near term,” it said.
Meanwhile, the potential slowdown in domestic economic activity due to the budget impasse as well as continued uncertainty in the global economic environment could present downside risks to inflation.
“Against this backdrop, the BSP continues to keep a close watch over price developments in the country and shall consider all relevant information at its next monetary policy meeting on May 9, 2019 to ensure that the monetary policy stance remains consistent with the BSP’s primary mandate of price stability,” it said.
The annual inflation in the National Capital Region decelerated further to 3.2 percent in March from 3.8 percent a month ago and 5.2 percent a year ago.
All the commodity groups posted slower annual mark-ups, except for transport, recreation and culture and education. The annual hike of the transport index was higher at 6.3 percent during the month, while the indices of recreation and culture and education retained their previous month’s annual rates of 2.5 percent and 1.4 percent, respectively.
The inflation in the provinces slowed to 3.4 percent in March from 3.8 percent a month ago and 4.1 percent a year ago.
Nicholas Mapa, senior economist of ING Bank Manila, said inflation continued to slide with the basket-heavy food sub-sector weighing on the headline number as supply conditions normalized.
“… With supply chains normalizing, the 2018 inflation pop has faded very quickly with inflation now firmly within target to help solidify expectations for within-target inflation for this year and next,” Mapa said.