Inflation rise to 4.3 percent won’t lead to wage hike

CONSUMER prices in March rose at the same pace as the previous month, signaling President Benigno Aquino 3rd not to order salary hike for minimum wage earners.

The National Statistics Office (NSO) said that the inflation rate went up by 4.3 percent in March, the same rate recorded in February. Inflation a year ago was 4.4 percent.

President Aquino had said that the government may raise minimum wages if inflation hit 5 percent.

At present, the minimum wage stood at P404 a day for non-agriculture and P367 a day for agriculture.

The March inflation rate was within the Bangko Sentral ng Pilipinas’ (BSP) projection of between 4 percent and 5 percent.

In the first three months, the inflation average at 4.1 percent.

The central bank earlier raised the policy rates for overnight deposits to 4.25 percent on March 24. The next policy meeting is on May 5.

The prices of unleaded gasoline, kerosene, diesel oil and liquefied petroleum gas or LPG increased by an average of 0.42 centavos in March, which is higher than the 0.08 average increase in the previous month.

“This is a result of domestic pump prices reacting to the high and volatile international crude prices that is expected to affect global food prices,” Rolando Tungpalan, National Economic and Development Authority deputy director general said.

Tungpalan said that the increase in policy rates was prompted by price pressures, particularly from the continuing geopolitical tensions in the Middle East and North Africa, coupled with the steady demand for oil despite the calamity-induced reduction in Japanese petroleum demand.

Indonesia and Thailand also adjusted their policy rates. Indonesia raised its policy rates by 25 basis points to 6.75 percent in early February, while Thailand increased also by 25 basis points to 2.5 percent effective March 23.

Excluding selected food and energy items, core inflation eased to 3.4 percent in March from 3.6 percent in February.

The NSO blamed the costlier services to the series of price
hikes in gasoline and diesel nationwide.

“Higher land transport fares in most of the regions including NCR [National Capital Region] also contributed to the uptrend,” NSO said.

The inflation rate in services went up to 5.7 percent in March from 4.9 percent in February.

Price decreases on liquefied petroleum gas (LPG) and lower charges for electricity rates in Metro Manila, on the other hand, contributed to the downtrend in prices of fuel, light and water (FLW).

The decline in the prices of LPG also offset higher prices of kerosene and increased charges for electricity rates in many regions.

The NSO said that prices of FLW fell to 7.3 percent in March from 10 percent in February.

Meanwhile, the annual price increase in food, beverages and tobacco was higher at 4.4 percent in March from 4.2 percent in February.

Prices in Metro Manila went down to 4 percent in March, a 0.6 percentage point lower than its February rate of 4.6 percent. –Darwin G. Amojelar Senior Reporter and Lailany P. Gomez, Manila Times