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Friday, July 19, 2024

3.8% April inflation rate still within forecast range, says BSP

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Philippine inflation accelerated for the third consecutive month in April due to  higher prices of food and non-alcoholic beverages, according to the Philippine Statistics Authority (PSA). 

PSA reported that inflation rate rose 3.8 percent in April, higher from 3.7 percent in March and 6.6 percent in April 2023. 

The statistics agency said the uptrend in the overall inflation in April 2024 was primarily influenced by the higher year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 6 percent during the month from 5.6 percent in March 2024.

April witnessed a surge in food inflation, rising to 6.3 percent from the previous month’s 5.7 percent. Key contributors include vegetables (up by 4.3 percent), fish (0.4 percent), and ready-made products (4.8 percent). 

Meanwhile, rice—a staple in Filipino households—recorded a lower inflation rate of 23.9 percent in April, down from 24.4 percent in March.

Despite this decline, rice remains the primary driver of inflation, accounting for 2.1 percentage points. 

The faster annual growth rate of the transport index at 2.6 percent in April 2024 from 2.1 percent in the previous month also contributed to the uptrend of the overall inflation.

In addition, higher inflation rate was also noted in information and communication at 0.5 percent during the month from 0.4 percent in March 2024.

The April 2024 inflation of 3.8 percent is within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 3.5 to 4.3 percent. 

“The inflation outturn is consistent with the BSP expectations that inflation could accelerate temporarily above the target range in the next two quarters of the year due to the possible negative impact of adverse weather conditions on domestic agricultural output and positive base effects,” BSP said. 

“Nonetheless, the BSP expects average inflation to return to the target range for full year 2024 and 2025,” it added. 

BSP said the possible further price pressures are linked mainly to higher transport charges, elevated food prices, higher electricity rates, and global oil prices. 

“Potential minimum wage adjustments could also give rise to second-round effects,” it added. 

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said while inflation rate remains within the government’s target range, it underscores the need for vigilance. 

“We are taking comprehensive measures to ensure food security amid geopolitical concerns and weather patterns worsened by climate change,” Balisacan said. 

“The government’s major strategies aim to increase productivity, build the resilience of the agriculture sector, and improve the efficiency of food systems,” he added. 

The PSA reported that the country’s inflation rate for the bottom 30 percent income households increased to 5.2 percent in April 2024 from 4.6 percent in March.

This brings the average inflation for this income group from January to April 2024 to 4.4 percent, lower than what the nation posted in the same period last year at 7.4 percent.

Editor’s Note: This article has been updated. It was originally posted with the headline “PH inflation rate hits 5.2 percent overall in April 2024, PSA reports.”

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