The country’s headline inflation rate likely stayed at an over two-year high of 4.7 percent in March, the Bangko Sentral ng Pilipinas (BSP) estimated on Wednesday.
In a statement, BSP Governor Benjamin Diokno said March’s point inflation forecast was within the central bank’s 4.2- to 5.0-percent projected range for the month.
The outlook matched the 4.7-percent consumer price growth in February, but quicker than the year-ago’s 2.5 percent.
If correct, the estimated figure would be the fastest in over two years, or since December 2018’s 5.1 percent.
The Philippine Statistics Authority (PSA) will release official March inflation data on April 6, 2021.
“The downward adjustment in Meralco electricity rates as well as lower prices of key food items due to supply conditions and the continued implementation of price caps on meat products are the main sources of downside price pressures during the month,” Diokno said.
Meralco, or Manila Electric Co., reduced its per-kilowatt-hour (kWh) rate for households consuming 200 kWh monthly by P0.3598 last month.
On February 8, the government implemented a 60-day price ceiling on pork and chicken products in Metro Manila. Under Executive Order 124, the price ceiling per kilogram of kasim (shoulder) and pigue (back leg or ham cut) is P270, P300 for liempo (belly), and P160 for dressed chicken.
“These factors could be partly offset by higher oil prices and the peso depreciation, however,” Diokno added.
According to the Department of Energy, local oil companies hiked fuel prices two times this month. On March 2, gasoline has increased by P1.00 per liter, P0.85 per liter for diesel and kerosene by P0.70 per liter. On March 16, gasoline has jumped by P1.25 per liter, P0.90 per liter for diesel and P0.85 per liter for kerosene.
“Moving forward, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” Diokno concluded.
On March 25, the Bangko Sentral kept its key interest rates at their record low despite seeing above-target average inflation rate this year.
Overnight borrowing, lending and deposit rates were kept at 2.00 percent, 1.50 percent and 2.50 percent, respectively, following the BSP’s policymaking Monetary Board’s second rate-setting policy meeting for 2021.
Diokno has said inflation may breach the upper end of the 2- to 4-percent target range this year, mirroring the impact of supply-side constraints on domestic prices of key food commodities such as meat as well as the sustained acceleration in international oil prices.
BSP Governor Francisco Dakila Jr., fo his part, said the central bank hiked its inflation outlook from 4 percent to 4.2 percent for this year. The 2022 projection was revised upward to 2.8 percent from 2.7 percent.
Dakila said supply side shocks on prices are transitory in nature, adding that the central bank is of the view the inflation path will decelerate below the midpoint of the target range towards the fourth quarter of the year, and continuing on to the first quarter of next year before settling close to the midpoint.