March inflation steady at 4.3%

MANILA, Philippines –  The rise in consumer prices was steady in March at 4.3 percent and well within the Bangko Sentral ng Pilipinas’ expectation, the National Statistics Office (NSO) reported yesterday.

BSP Governor Amando M. Tetangco Jr. said in a text message to reporters that last month’s inflation was well within the four percent to five percent forecast set by the central bank for March and was unchanged from the 4.3 percent registered in February.

“This tells us that price movements continue to be well-behaved,” Tetangco stressed.

However, he pointed out that monetary authorities would continue to look out for second round effects arising from the escalating global oil and food prices.

“Nevertheless, we will continue to monitor developments, particularly for any signs of second round effects and shifts in inflation expectations to ensure that our policy settings remain appropriate,” Tetangco said.

The continued build up in inflation pressures prompted the BSP to raise interest rates by 25 basis points last March 24 after keeping policy rates at record lows for 20 straight months or since July 2009. This brought the overnight borrowing rate to 4.25 percent and the overnight lending rate to 6.25 percent.

Data from NSO showed that average inflation eased slightly to 4.1 percent in the first quarter of the year from 4.2 percent in the same quarter last year.

The NSO added that core inflation which excludes food and energy prices eased to 3.4 percent in March from 3.6 percent in February. This brought the average core inflation to 3.4 percent in the first three months of the year from 3.5 percent in the same period last year.

The government said inflation in the National Capital Region (NCR) eased to four percent in March from 4.6 percent in February while inflation in areas outside NCR picked up to 4.5 percent from 4.2 percent.

Inflation for the food, beverage, and tobacco (FBT) group increased to 4.4 percent in March from 4.2 percent in February as inflation for food alone jumped to 4.5 percent from 4.3 percent. Inflation for service increased to 5.7 percent from 4.9 percent while that of miscellaneous items inched up to 1.1 percent from one percent.

The fuel, light, and water (FLW) group eased to 7.3 percent in March from 10 percent in February despite the series of price hikes in gasoline and diesel nationwide. The increase in the fuel index was pulled down by the reduction in the prices of LPG and lower electricity rates.

The housing and repair index remained at 2.1 percent. –Lawrence Agcaoili (The Philippine Star)