By Katherine K. Chan, Reporter
FASTER PRICE INCREASES in fuel, electricity and food including rice, drove Philippine inflation past the Bangko Sentral ng Pilipinas’ (BSP) goal for the primary time in nearly two years, the Philippine Statistics Authority (PSA) reported.
The patron price index accelerated to 4.1% in March from 2.4% in February and 1.8% in the identical month last yr.
This was the quickest pace in nearly two years or for the reason that 4.4% in July 2024 and likewise marked the primary time since then that the headline print breached the BSP’s 2%-4% goal.
March inflation also got here in above the three.8% median forecast in a BusinessWorld poll of 18 analysts and the central bank’s 3.1%-3.9% estimate for the month.
Within the three months to March, inflation averaged 2.8%.
The BSP in an announcement said inflation accelerated in March because the Middle East conflict disrupted global oil trade, driving up prices of local fuel, electricity in addition to rice.
“Looking ahead, mounting risks to the inflation outlook require sustained vigilance. The BSP will rigorously consider incoming data at its upcoming monetary policy meeting to evaluate the necessity for motion consistent with its price stability mandate,” the central bank said.
National Statistician Claire Dennis S. Mapa attributed the pickup to faster price increases within the transport index, particularly in gasoline and diesel, which accounted for 54.8% of the general inflation rate in March.
Through the month, transport inflation stood at 9.9%, reversing from the -0.3% clip recorded in February.
This got here as soaring pump prices pushed gasoline and diesel inflation to its fastest in over three years at 27.3% (from -5.7%) and 59.5% (from -1.3%), respectively.
Mr. Mapa said the faster transport and food inflation was “definitely” driven by the oil crisis brought on by the Middle East conflict.
He noted there have been already spillover effects seen in several commodity groups last month including food, housing, water, electricity, gas and other fuels.
“Based on previous years, once we also had spikes in fuel prices on the earth market, the impact was quick on other commodity items. That’s why within the 13 commodity groups we track, almost 10 of them rose,” Mr. Mapa told a news briefing on Tuesday.
In March, fuel retailers increased pump prices by as much as P43.50 per liter for gasoline, P67.35 per liter for diesel and P70.90 per liter for kerosene.
Mr. Mapa said he hopes transport inflation in the approaching months is not going to mirror the degrees seen in 2022 or when oil markets faced supply and price shocks amid Russia’s Ukraine invasion.
Nevertheless, he noted that April inflation is prone to speed up as fuel prices are expected to proceed rising this month, adding that some commodities should reflect the lagged impact of earlier price hikes.
“Definitely we’re seeing higher numbers in April because we had a series of price increases in the course of the first week and we’re not seeing any development that it would go down.”
Meanwhile, inflation for housing, water, electricity, gas and other fuels rose to 4.5% in March from 3.5% in February.
Electricity inflation was faster at 9.2% in March from 6.7% in February, while inflation for liquefied petroleum gas (LPG) quickened to 2.2% from -2.2% in February.
Manila Electric Co. raised electricity rates by 64.27 centavos per kilowatt-hour (kWh) to P13.8161 per kWh for its customers within the greater Metro Manila area. This meant households consuming 200 kWh monthly paid about P129 more of their electricity bill for March.
LPG prices were likewise higher in March, with the household-standard 11-kilogram (kg) LPG tank ranging between P818.62 and P1,128.62, based on data from the Department of Energy.
In accordance with the Department of Economy, Planning, and Development (DEPDev), the federal government has secured 165.6 million liters of diesel for April, which it said seeks to “stabilize domestic fuel supply and ease transport costs.”
RICE PRICES SPIKE
Meanwhile, rising transportation costs also sent food prices up in March, with the heavily weighted food and nonalcoholic beverage index heating as much as 3% in March from 1.8% within the prior month.
Alternatively, rice prices continued to leap in March, bringing inflation for the staple grain to three.6% from -3.4% in February.
This was the primary time since December 2024 that rice inflation settled within the positive territory or when it stood at 0.8%.
Based on PSA data, the common cost of local regular milled rice climbed by 5.8% to P48.69 per kg within the second half of March from P46.02 per kg a yr ago. The worth of well-milled rice also went up by 8.02% annually to P56.68 per kg, while the value of special rice rose by 3.79% to P64.07 per kg.
Mr. Mapa said there’s a risk that rice prices will go up further in the approaching months as transport inflation continues to hurry up.
DEPDev said the federal government has enforced anti-hoarding for petroleum products and expanded the P20 rice program to make sure ample supply and help bring food prices down nationwide.
PURCHASING POWER FALLS
Meanwhile, core inflation, which excludes volatile food and fuel prices, picked as much as 3.2% in March from 2.9% in February and a pair of.2% a yr earlier. This was the fastest core print in two years or for the reason that 3.4% in March 2024.
The peso’s purchasing power, or the worth of every P1, also slid to its lowest ever at 75 centavos in March.
Which means the worth of P100 in 2018 can now only buy goods and services value P75.
PSA data also showed that inflation for the underside 30% of income households quickened further to 4.2% from 2.5% in February and 1.1% last yr.
Within the National Capital Region (NCR), inflation also accelerated to three.6% in March from 1.9% in February and a pair of.1% a yr ago.
Outside NCR, consumer prices picked as much as 4.2% in March from 2.5% in February and 1.8% last yr.
With inflation picking up faster than anticipated, analysts said the case for the BSP’s monetary policy tightening may now have change into stronger.
March was the primary time in over a yr or since February 2025 that the central bank’s forecast missed the actual inflation print.
For Aris D. Dacanay, ASEAN economist at HSBC Global Investment Research, last month’s goal breach calls for a policy rate hike to 4.5% on the Monetary Board’s upcoming April 23 meeting.
He noted that they expect the central bank to execute its price stability mandate and address the potential spillover effects of oil shocks at the same time as growth stays muted.
“Though uncertainty looms over the direction of worldwide commodity prices, we expect it will be important to be ahead of the curve, most especially with the danger in oil prices tilted to the upside,” Mr. Dacanay said in a report on Tuesday.
“Yes, growth was already weak before the oil shock began, and the central bank might resolve to ‘look past’ the availability shock. But given the BSP’s core mandate of price stability, we expect the BSP to, at least, tamp down the potential spillover effects the oil shock can have on non-energy prices,” he added.
Last month, the central bank left its key rate unchanged at 4.25% in an off-cycle meeting, a move BSP Governor Eli M. Remolona, Jr. said aimed to calm markets jolted by the Middle East war.
Rizal Business Banking Corp. Chief Economist Michael L. Ricafort also sees the BSP raising rates throughout the yr to drive inflation back to its goal range as he expects consumer prices to rise further because the war drags on.
“(March inflation was) already above the BSP goal range of two%-4% that may lead to rate hike/s to bring inflation back to the said goal range to meet the value stability mandate (and) to raised manage each inflation and inflation expectations despite largely supply-side driven and external in nature that’s beyond the country’s reasonable control,” he said in a Viber message.
Chinabank Research said inflationary pressures will likely persist through yearend but sees the central bank standing pat for now.
“Price pressures are prone to persist for the remainder of the yr, and second-round effects are expected in food and repair activities,” it said in a separate note. “We expect the BSP to carry rates on the meeting this month as inflation stays largely supply-driven without evidence of excess demand.”