BSP places March inflation at 3.0-3.8%

Inflation is expected to hover above the 3-percent level in March due to power rates and the depreciation of the Philippine peso, the Bangko Sentral ng Pilipinas (BSP) said Monday.

"The BSP forecast suggests that March inflation could settle within the 3.0 to 3.8-percent range," BSP Governor Amando M. Tetangco, Jr. said in a text message to reporters.

This means that inflation in March would be the second consecutive month in which consumer prices climbed by more than 3 percent, after climbing to 3.3 percent in February – the first time in more than two years inflation quickened above 3 percent since revving up at 3.7 percent in November 2014.

"The higher power rates in Meralco-serviced areas due to the Malampaya maintenance shutdown along with the weaker peso could be partially offset by the decline in fuel and food prices this month," Tetangco noted.

Meralco implemented a P0.66 per kilowatt hour (/kWh) increase in March, bringing the overall rate for the month to P9.67/kWh.

The peso continued to trade against the dollar above the P50.00:$1 level for the month, falling to more than 10-year low at P50.40:$1 early this month, the weakest since P50.43:$1 on September 12, 2006.

"Moving forward, the BSP will remain watchful of economic and financial developments that could affect the inflation outlook, in line with its commitment to price stability conducive to a balanced and sustainable growth of the economy," Tetangco said.