Inflation in the Philippines rose for the second consecutive month in March, with rice prices playing a significant role in the uptick. The consumer price index (CPI) showed a 3.7 percent year-on-year increase in March, surpassing the February reading of 3.4 percent, according to the Philippine Statistics Authority.
Despite exceeding market expectations of a 3.8-percent inflation rate, the figure was still within the Bangko Sentral ng Pilipinas (BSP) forecast range of 3.4 to 4.2 percent for the month. The inflation rate remained within the BSP’s target band of 2 to 4 percent for the fourth consecutive month, although it approached the upper limit.
National Statistician Claire Dennis Mapa highlighted rice as the main driver of the faster inflation in March, noting that rice inflation reached a 15-year high of 24.4 percent due to high global prices. This surge in rice prices led to an overall food inflation rate of 5.7 percent, the highest since November 2011.
Mapa also projected that rice prices would continue to increase at a double-digit pace until July 2024, citing the ongoing El Niño dry spell and base effects from last year’s low rice inflation figures.
Secretary Arsenio Balisacan of the National Economic and Development Authority expressed concerns about extreme weather conditions that could affect food supply and lead to price hikes. Meanwhile, the contribution of transport to inflation increased to 2.1 percent in March, attributed to higher oil prices.
BSP Governor Eli Remolona Jr. acknowledged the possibility of inflation temporarily exceeding the 2 to 4 percent target range in the next two quarters due to adverse weather conditions and base effects. Economic officials are monitoring various factors that could impact prices, such as transportation charges, food commodity prices, and electricity rates.
In response to the inflation data, economists at Bank of the Philippine Islands predicted that the BSP would maintain interest rates at 6.5 percent in the first half of the year. The Monetary Board is scheduled to meet on Monday (April 8) to decide on interest rates.
