Headline inflation eased slightly to 2.4 percent year-on-year in March from 2.5 percent in February. The March inflation reading was within the BSP’s range forecast of 2.1-2.9 percent for the month. The resulting year-to-date average inflation rate of 2.4 percent was also within the Government’s inflation range target of 3.0 percent ± 1.0 percentage point for 2015. Meanwhile, core inflation—which excludes certain volatile food and energy items to better capture underlying price pressures—rose slightly to 2.7 percent in March from 2.5 percent in the previous month. On a month-on-month seasonally-adjusted basis, inflation was steady at 0.1 percent in March.
The slightly lower inflation in March was attributed largely to slower increases in prices of food items. In particular, food inflation slowed down as a result of adequate domestic supply of key food items, particularly rice, corn, meat, milk, oils, fruits, and sugar. Conversely, non-food inflation rose due mainly to the upward adjustment in electricity rates as well as higher gasoline and diesel prices in most regions, which more than offset the reduction in the flagdown rate for taxi services.
Governor Amando M. Tetangco, Jr. said that the latest inflation reading is in line with the BSP’s assessment of a manageable inflation environment over the policy horizon. Looking ahead, the BSP will keep a close watch on price developments and the evolving inflation outlook in line with the BSP’s commitment to ensure price stability conducive to balanced and sustainable economic growth.
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