The Bangko Sentral ng Pilipinas (BSP) said inflation rate may continue to rise in the coming months because of the impact of El Nino drought on prices of commodities.
It made the statement after inflation picked up to 3.7 percent in March from 3.4 percent in February. The BSP said the latest inflation was consistent with its projections that inflation path would likely to be within the target range in the first quarter.
“But [it] will accelerate in the middle of the year due to the possible impact of adverse weather conditions on domestic agricultural output as well as positive base effects,” it said.
Inflation in the first quarter of 2024 averaged 3.3 percent, still within the government’s 2024 target range of 2 percent to 4 percent.
The BSP said its Monetary Board would consider the recent price developments and would update its outlook for inflation at its upcoming monetary policy meeting.
The Monetary Board will meet on April 8, 2024 to decide on whether it would keep or adjust the policy interest rates. It kept the overnight borrowing rate at 6.25 percent in February.
Data showed that the March inflation was within the BSP’s forecast range of 3.4 to 4.2 percent for the month.
The PSA said that on a month-on-month seasonally adjusted basis, headline inflation slowed down to 0.3 percent in March from 0.9 percent in February.
Core inflation, which excludes selected volatile food and energy items and measures underlying demand-side price pressures, decelerated to 3.4 percent year-on-year in March from 3.6 percent in February.
Headline inflation rose on higher food prices, particularly those of rice and meat.
Non-food inflation held steady year-on-year as higher inflation for transport, restaurants and accommodation services was offset by slower inflation for housing, water, electricity, gas and other fuels.