EL NIÑO, LA NIÑA CHALLENGES

Gov’t strengthens measures to tame upward price pressures

MANILA – The government will strengthen measures to tame upward price measures amid the El Niño and La Niña challenges, the National Economic and Development Authority (NEDA) said.

NEDA issued the statement after the Philippine Statistics Authority (PSA) reported on Friday that headline inflation increased to 3.7 percent in March from 3.4 percent in February.

The headline inflation during the month, however, was still significantly lower than the 7.6 percent recorded in March last year.

For the first three months of the year, headline inflation settled at 3.3 percent, still within the government’s 2 to 4 percent target. Core inflation, which excludes selected food and energy items, slowed down to 3.4 percent in March 2024 from 3.6 percent in the previous month.

In March 2023, core inflation was higher at 8.0 percent.

In a briefing, National Statistician Dennis Mapa said the uptrend in the headline inflation in March was primarily due to the higher year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 5.6 percent from 4.6 percent in February 2024.

Mapa said food inflation rate in particular picked up to 5.7 percent from 4.8 percent in February 2024. The increase was influenced by rice inflation, which accelerated to 24.4 percent from 23.7 percent, and meat inflation which went up to 2.0 percent from 0.7 percent.

The food inflation rate was tempered, however, by the slower price increases of eggs and other dairy products (2.3 percent from 3.5 percent), fruits (7.9 percent from 8.7 percent), bread and other cereals (4.6 percent from 5.1 percent), and ready-made food products (4.3 percent from 4.6 percent).

On the other hand, deflation was recorded for fish (-0.9 percent from 0.7 percent), vegetables (-2.5 percent from -11.0 percent), and sugar (-2.9 percent from -2.4 percent).

Non-food inflation, meanwhile, remained stable at 2.4 percent during the month.

The upward trend in the March 2024 inflation rate for transportation, restaurants and accommodation, health, and recreation was also offset by the slower inflation in housing and utilities.

Medium-term inflation path

In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said the March 2024 inflation is within the BSP’s forecast range of 3.4 to 4.2 percent.

“The inflation outturn is consistent with the BSP expectations that inflation will likely remain within the target range in Q1 (first quarter) 2024 due largely to negative base effects,” the BSP said.

“However, inflation could temporarily accelerate above the target range in the next two quarters of the year due to the possible adverse impact of adverse weather conditions to domestic agricultural output and positive base effects,” it added. /