Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Thursday inflation in March likely accelerated to at least 3.3 percent from 3 percent in February, driven by higher oil and power prices.
Diokno said in a message to reporters the March inflation would likely settle within a range of 3.3 percent to 4.1 percent.
“The continued oil price hikes, along with high electricity rates in Meralco-serviced areas, higher meat prices and the peso depreciation are the primary sources of inflationary pressures during the month,” Diokno said.
He said these could be offset in part by lower water rates in Maynilad and Manila Water-serviced areas and the decrease in prices of rice, fish and vegetables, owing to easing supply constraints.
“Looking ahead, the BSP will continue to monitor emerging price developments and possible second-round effects to help achieve its primary mandate of price stability that is conducive to balanced and sustainable economic growth of the economy,” he said.
Fitch Solutions Country Risk and Industry Research, a unit of Fitch Group, earlier kept its forecast of a 75-basis-point hike in the policy rate of the Bangko Sentral ng Pilipinas for 2022, from a record-low of 2 percent amid the rising inflation and interest rates globally.
Fitch Solutions expects a combination of rising inflationary pressures, continued economic recovery and rising interest rates around the world to prompt the BSP to tighten its monetary policy over the coming months.
It said the easing of COVID-19 restrictions should support a recovery in domestic economic activity, allowing some room for interest rate hikes, particularly as real interest rate remained negative.
Diokno said in a previous briefing there was nothing to worry about the rising consumer prices because the country’s inflation challenges were more manageable than in some advanced and emerging economies.
He said the root causes of inflation were not necessarily the same. He said other countries were more affected by higher energy and other commodity prices than the Philippines.
Inflation in the first two months averaged 3 percent, the midpoint of the 2022 target range of 2 percent to 4 percent.
The Monetary Board kept the policy rate at a record low of 2 percent in March, amid the continuing manageable inflation environment.
The Monetary Board, however, raised the inflation forecast for 2022 to 4.3 percent from 3.7 percent. The forecast for 2023 was also raised to 3.6 percent from 3.3 percent.