MANILA, Philippines - Inflation eased for a fifth straight month in a row at 2.6 percent in March from 2.7 percent in February despite soaring oil prices in the world market as well as the provisional 50-centavo jeepney fare hike, the National Statistics Office (NSO) reported yesterday.
The NSO said inflation has been slowing down since the 4.7 percent rate in November and last month’s inflation was the lowest for two and a half years or since September 2009 when inflation averaged 2.2 percent.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said in a text message to reporters that inflation last month was well within the central bank’s forecast range of 2.2 percent to 3.1 percent.
“Slower annual increases in utility rates and prices of beverages and clothing, among others, resulted in the sustained slowdown in inflation,” Tetangco stressed.
The BSP has set an inflation target of three percent to five percent this year and next year. Based on the latest forecast as of March 1, the central bank sees inflation averaging 3.1 percent this year and 3.4 percent next year.
Data showed that inflation averaged 3.1 percent in the first quarter of the year from 4.5 percent in the same quarter last year.
“Year-to-date average inflation of 3.1 percent is almost at the lower end of the target range for the year. This further supports our view of manageable inflation over the policy horizon,” he added.
Due to benign inflation outlook and fragile global economic growth, the BSP has so far slashed key policy rates by 50 basis points this year, bringing the overnight borrowing rate back to a record level of four percent and the overnight lending rate to six percent.
The central bank reduced interest rates by 25 basis points last Jan. 19 and by another 25 basis points last March 1.
Tetangco pointed out monetary authorities would continue to monitor price developments particularly volatilities in international commodity prices to see how these would impact on domestic price setting.
“We will also follow data closely to see how these previous policy actions are working through market behavior, to see if any further policy adjustment is needed to ensure continued well-behaved price expectations and action,” he added.
Annual inflation in the National Capital Region (NCR) went up to 2.7 percent in March from 2.3 percent in February due to the higher annual increase in the heavily-weighted food and non-alcoholic beverages index as well as the indices of clothing and footwear; furnishing, household equipment and routine maintenance of the house; recreation and culture; and restaurants and miscellaneous goods and services.
On the other hand, the annual inflation rate in areas outside NCR further slowed down to 2.6 percent from 2.8 percent due to slower annual increments in all the commodity groups except in furnishing, household equipment and routine maintenance of the house; health; and education indices.
The annual gain in alcoholic beverages and tobacco index at the national level eased to 4.3 percent in March from 4.7 percent in February followed by clothing and footwear index to 3.6 percent from 3.7 percent as well as the housing, water, electricity, gas, and other fuels index to 4.5 percent from 4.6 percent.
Furthermore, the annual inflation for transport index dropped to 3.3 percent from 3.9 percent followed by recreation and culture index to 2.2 percent from 2.6 percent as well as restaurants, miscellaneous goods and services index to 2.9 percent from three percent.
On the other hand, inflation for furnishing, household equipment and routine maintenance of the house index increased to 2.3 percent from 2.1 percent while the rest of the commodity groups such as the food alone index remained at their last month’s rates. - By Lawrence Agcaoili