Philippines inflation eases, but still above target band
MANILA - Philippine inflation eased for the first time in six months in March as price increases for certain food items slowed down, but it stayed outside the central bank’s target range of 2 per cent - 4 per cent for the year.
The Consumer Price Index rose 4.5 per cent from a year earlier, versus a 26-month high of 4.7 per cent in February, as the heavily-weighted food and non-alcoholic beverage group registered a slower rise, the Philippine Statistics Authority (PSA) said on Tuesday.
Last month’s inflation came in below the median forecast of 4.8 per cent in a Reuters’ poll and within the central bank’s projected range of 4.2 per cent - 5.0 per cent for March.
Core inflation, which excludes volatile food and fuel prices, was steady at 3.5 per cent.
Prices increases for vegetables and fish decelerated but the closely-watched prices of meat products continued to rise at increasing speed, the PSA said.
The Philippine central bank said the latest headline figure was in line with expectations that inflation could settle above the target this year due to meat supply constraints.
Despite elevated inflation, the Bangko Sentral ng Pilipinas (BSP) has kept its benchmark interest rate at a record low of 2 per cent since November, maintaining an accommodative policy stance to support an economy facing renewed challenges from fresh coronavirus curbs.
On Tuesday, BSP Governor Benjamin Diokno said current monetary policy settings remained appropriate but added the central bank was ready to take “immediate measures” while monitoring inflation pressures.
“Tighter domestic supply of meat products and improved global economic activity could lend further upward pressures on inflation,” he said.
The BSP, which reviews monetary settings every six weeks, will hold its next policy meeting on May 13.