Bangko Sentral forecasts March inflation at 3.8-4.6%
March 29, 2018 | 3:40pm
The Bangko Sentral ng Pilipinas’ Department of Economic Research upwardly revised its inflation forecast for this month to 3.8-4.6 percent using 2012 as base year. File
MANILA, Philippines (Updated 4:57 p.m.) — Inflation in March likely hit 3.8-4.6 percent using 2012 as base year, the central bank said on Wednesday, as increased electricity rates and upswing in fuel prices probably pushed up prices of key consumer items for the month.
The Bangko Sentral ng Pilipinas’ Department of Economic Research said its inflation forecast for this month is revised upward after incorporating all recent developments and information that could affect price dynamics.
The top end of the BSP-DER's March projection is above the government’s 2-4 percent target band for 2017 through 2019.
“Adjustments in electricity rates owing to increased power generation charges as well as higher prices of domestic petroleum products, reflecting recent depreciation of the peso, are expected to contribute to upside price pressure,” the BSP-DER said.
“There were also observed higher rice prices during the month,” it added. “Meanwhile, these upside pressures could be partly offset by lower LPG prices.”
The Philippine Statistics Authority recently announced that it would shift the base year for monthly consumer price index to 2012 to reflect “economic, social and technological changes” that likely influenced consumption patterns.
Last February, headline inflation, as calculated on a rebased index, accelerated to 3.9 percent, the fastest pace in more than three years.
The BSP has been reluctant to hike policy rates in the face of building price pressures, although Governor Espenilla, Jr. said the economy is sturdy enough to “absorb some policy tightening if warranted.”
“Going forward, the BSP will continue to monitor closely evolving price conditions over the policy horizon against any signs of incipient price pressures and stands ready to take appropriate measures as necessary,” the BSP-DER said.
Under the revised price index, the central bank expects inflation to average 3.9 percent this year, before easing to 3 percent in 2019.
The PSA will release the March inflation data on April 5.
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