Metrobank Research, a unit of Metropolitan Bank & Trust Co., said it is keeping its 2024 yearend average inflation forecast at 4.3 percent, with a downward bias despite the rising rice prices, the effects of El Niño and emerging geopolitical risks.
“As the year-to-date headline inflation print is now closer to the lower band of Metrobank Research’s baseline forecast range, a re-evaluation of current estimates may be necessary in the near term,” it said.
It noted that the March headline inflation came in lower than the consensus forecast of 3.8 percent and within the Bangko Sentral ng Pilipinas’ (BSP) forecast of 3.4 percent to 4.2 percent due to the continuing upward price pressures on key food items, especially rice.
The major contributory factor to the March inflation is the continuous acceleration of rice prices, which increased further to 24.4 percent year-on-year from 23.7 percent in February 2023, exacerbated by low base effects from the same period last year. It continues to offset decreases in prices on some food items.
The Philippine Statistics Authority (PSA) also expects rice inflation to sustain its upward trend until July because of the continuous increase in global rice prices, compounded by base effects as rice prices spiked beginning August 2023.
Meanwhile, the Department of Agriculture (DA) expects to import less rice this year on projected increase in domestic production despite the looming effects of El Niño on harvests. It deemed the US Department of Agriculture (USDA)’s projection that the Philippines could purchase 4 million metric tons of imported rice for 2024 a “worst-case scenario”.