By Luisa Maria Jacinta C. Jocson, Journalist
TOTAL INFLATION likely accelerated further in March and may even have exceeded the target for the first time in three months, the Bangko Sentral ng Pilipinas (BSP) said.
Inflation is expected to be between 3.4% and 4.2%, the central bank said in a statement on Monday.
The upper bound of the BSP forecast could have exceeded the target by 2-4 percent for the first time in three months.
The lower end of the forecast would remain unchanged from 3.4% in February.
Over one year, inflation would be lower than 7.6% a year earlier.
A Business world a poll of 17 analysts gave a median estimate of 3.8% for March inFlation, within the framework of the BSP forecasts.
“The continued rise in rice and meat prices as well as rising domestic oil and electricity prices are the main sources of upward price pressures for the month,” the BSP said.
The latest data from the Ministry of Agriculture showed that the average retail price of a kilo of well-milled local rice ranged between 49 and 55 pesos as of March 27, higher than the average of 39 to 46 pesos a year ago. year. A kilo of regular milled rice costs P50, higher than the P34 to P40 a year ago.
Manila Electric Co. (Meralco) increased the rate for a typical household by P0.0229 to P11.9397 per kilowatt hour (kWh) in March due to higher transmission costs.
Fuel prices continued to rise in March. The pump price adjustments amounted to a net increase of P2.30 per liter for gasoline and P0.65 per liter each for diesel and kerosene.
“At the same time, falling prices of fruits, vegetables and fish as well as the appreciation of the peso could contribute to downward pressures on prices,” the BSP said.
The local statistics authority is expected to release March inflation data on April 5.
Ruben Carlo O. Asuncion, chief economist of Union Bank of the Philippines, Inc. said inFlation could continue to exceed the objective in the months to come.
“We expect headline inflation to exceed 4% year-on-year from March with a strong contribution from the rice consumer price index (CPI) and latent effects of drought on prices of other crops, with the worst case scenario of almost 5%. %,” he said in an email.
In February, rice inFlation jumped to 23.7%, the fastest since 24.6% in February 2009.
Mr. Asuncion said his estimates show inflation could peak at 5% in May.
Colegio de San Juan de Letran associate professor Emmanuel J. Lopez said in an email inFThe situation could accelerate in March due to rising oil prices and the effects of the El Niño drought.
Rising inflation could prompt the central bank to keep rates high for longer.
“As the BSP, Finance Secretary Ralph G. Recto and even the President himself have mentioned, the central bank will likely take its time before loosening the monetary reins,” Aris D. Dacanay, HSBC economist for the ASEAN (Association of Southeast Asian Nations). ), said in an email.
“Inflation risks are still too tilted to the upside, while strong growth gives the central bank the luxury of keeping its key rate high for longer,” he added.
President Ferdinand R. Marcos, Jr. said earlier this month inFThe situation remains the country’s biggest problem and it may be too early to cut rates.
To control inflation, the BSP kept its benchmark rate stable at 6.5 percent, its highest level in 17 years, for a third consecutive meeting in February. It increased borrowing costs by 450 basis points (bps) from May 2022 to October 2023.
The Monetary Board will hold its next policy review on April 8.
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