The rate of increase in consumer prices softened in March this year after five consecutive months of acceleration, the Philippine Statistics Authority (PSA) reported on Tuesday, April 6.
The country’s headline inflation slowed from 4.7 percent (on-year) in February to 4.5 percent last month, its first easing since September last year due mostly to declines in food prices.
The latest inflation reading, however, remained above the 2.5 percent registered in March 2020 and the Bangko Sentral ng Pilipinas’ (BSP) target range of 2.0 percent to 4.0 percent for 2021.
Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua welcomed the slowing inflation, adding that the government expects the succeeding rates will soon align with their targets as a result of proactive interventions.
“We will continue to address supply issues and logistics bottlenecks to ensure price stability, especially for food and essential goods,” Chua said in a statement.
“We are working with a great sense of urgency to protect the purchasing power of the people, majority of whom have lower or forgone income as a result of the ECQ , and ensure better access to healthy, safe and affordable food,” he added.
National Statistician Claire Dennis S. Mapa said the deceleration was primarily driven by slower increase in prices of food items that accounted for nearly 36 percent of the total basket of consumer goods and services.
Heavily-weighted food and non-alcoholic beverages logged an inflation rate of 5.8 percent in last month, down from 6.7 percent in February 2021.
Prices of vegetables, fruits and fish also posted slower price increases during the month, Mapa noted.
However, PSA chief said that retail prices of meat, particularly pork, picked up to 20.9 percent as supply remained low.
Retail prices of pure pork meat in the National Capital Region averaged at P329 per kilo in March from P323 per kilo the previous month. In areas outside Metro Manila, it slightly declined to P312 from P317.
Softer price increases were likewise registered in the indices of alcoholic beverages and tobacco at 12.1 percent; furnishing, household equipment and routine maintenance of the house at 1.9 percent; and communication at 0.2 percent.
Restaurant and miscellaneous goods and services inflation also weakened to 3.1 percent in March.
Core inflation, which excluded volatile prices of food and energy items, remained from its February level at 3.5 percent, but quicker compared with 3.0 percent in the same month last year.
The March headline inflation brought the country’s three-month average to 4.5 percent, still above the government’s target range of 2.0 percent to 4.0 percent.
Nicholas Antonio T. Mapa, ING Bank N.V. Manila senior economist said the price freeze on meat items coupled with the harvest season helped food inflation slow, offsetting faster transport inflation.
Transport costs continued to pick up, logging at 13.8 percent due to higher retail fuel prices and implementation of social distancing guidelines.
But despite the slower inflation, Mapa noted that signs of weak domestic demand continued to manifest with the recreation and culture component posting negative inflation for the ninth straight month.
He said Filipinos likely cutting back on luxuries given the recession.
“Although it may be too early to deem the March 4.5 percent inflation the peak for the year, we do note that the likelihood of inflation hitting 5.0 percent has now diminished somewhat,” Mapa said.