Quantcast
Latest Stories

March inflation lowest since Sept ’09

By

Manila Electric Co. utility workers install electricity metres at a Manila neighborhood in this file photo. Inflation slowed for a fifth month in a row in March on lower utility and transport costs, according to government. AFP PHOTO/JAY DIRECTO

Inflation slowed for a fifth month in a row in March on lower utility and transport costs, but economists still expect the central bank to keep its key policy rate unchanged at a record low to guard against pressures from higher fuel prices.

The consumer price index (CPI) rose 2.6 percent in March from a year earlier, the National Statistics Office said on Wednesday, below the market’s consensus forecast of a 2.8-percent rise and the lowest since September 2009.

Year-to-date inflation is at 3.1 percent, well within the target of 3 to 5 percent.

“The very low [annual] inflation gives us a buffer from the uncertainties in the international oil market,” said Ruperto P. Majuca, assistant director general at the National Economic and Development Authority (Neda). Majuca said Neda was anticipating a “very slight” increase in year-on-year inflation in the coming quarters due to volatile oil prices but the full-year 2012 inflation would stay within target.

Former budget secretary Benjamin E. Diokno of the UP School of Economics also said the mild inflation to date provided some comfort for maintaining the present interest rate policy of the Bangko Sentral ng Pilipinas, but the prices of electricity, power, transport fare and wages should be closely monitored.

“The power crisis in Mindanao needs close monitoring since the immediate solution requires more costly power sources for both firms and households. Abroad, the uncertainty brought about by the Iran situation remains. A countervailing force is that the harsh winter is over and the usual driving season during summer months may be tempered by a slower economy,” Diokno said.

“We will continue to monitor price developments, particularly volatilities in international commodity prices, to see how these would impact domestic price setting,” Bangko Sentral Governor Amando Tetangco said in a mobile text message to reporters. “We will also follow data closely to see how previous policy actions are working through market behavior, to see if any further policy adjustment is needed to ensure continued well-behaved price expectations and action.”

The Philippines imports most of its fuel needs, exposing it to changes in global oil prices.

“In light of upcoming power tariff increases and the threat of a rally in global crude prices, we stick by our view that the benchmark rate will be left unchanged for the year, despite the current subdued inflation environment and growth risks,” said Radhika Rao, economist at Forecast Pte in Singapore.

Last month, Tetangco said inflation was expected to be comfortably within the 3- to 5-percent target range this year and next despite rising oil prices. The central bank has forecast average inflation at 3.1 percent and 3.4 percent in 2012 and 2013, respectively. The BSP cut its main policy rate by a quarter point to a record low 4 percent at a March 1 meeting to help cushion the economy from the impact of a global slowdown. Its next policy review is on April 19.

Most economists in a Reuters poll in March expected the central bank to leave the key overnight borrowing rate unchanged at 4 percent for the rest of the year to boost domestic demand.

But Jun Neri, economist at the Bank of the Philippine Islands, said the central bank should take advantage of slowing inflation and cut rates further.

“The fact that it is below the full-year target and even lower than the February figure [makes it] a golden opportunity for the BSP to ease further, mainly to assure against the risk of slower global and domestic growth,” Neri said. “They seem to be hinting to the markets that they will be neutral on [April 19], but I guess the figure today may have to lead them to reconsider.”

Policymakers elsewhere in Asia have kept monetary policy on hold recently as the global outlook remains uncertain, despite concerns about rising energy prices. With a report from Reuters


Follow Us


Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Inflation , March 2012 inflation , National Economic and Development Authority , National Statistics Office

  • http://profile.yahoo.com/RXZ5XENTQSFR6HPWMLEUG3TGGY Kerby

    PUTANGINANG PNOY KASI YAN KASALANAN NYA ANG LAHAT NG ITO!!!!!!! please sa mga makakaliwa’t mga unggoy na komunista dyan, pakipaliwanag nga sakin kung paanong magiging kasalanan nanaman ni Pnoy to? hehehe syempre wala kayong comment dito kasi good news to eh… di ba? magcocomment lang kayo kung bad news para isisi lahat ng bad news kay Pnoy. pero kung good news… JUST F”CKN IGNORE IT. di ba? hahahah mga gunggong, mangulekta na lang kayo uli ng revolutionary taxes para sa panggimik Joma sison sa netherlands. nabitin daw sya sa sayaw nila ni Ara Mina eh wahehehehehe

    • Diablo_III

      Uu kasalanan to ni PNOY napakahina ang inflation eh. Tsk tsk tsk. Sana mataas ang inflation. LOL.



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
Advertisement

News

  • US teacher fired over comment on black president
  • Magnitude-7.5 earthquake shakes Mexican capital
  • Title of new Hillary Clinton book: ‘Hard Choices’
  • Filipinos, Dutch re-enact crucifixion of Christ
  • 14 killed in car bombing in Homs
  • Sports

  • Nadal ousted by Ferrer in Monte Carlo quarters
  • Pacquiao shorts in Bradley fight sold for P1.7M in LA auction
  • Ryu pitches Dodgers past Giants
  • Alonso sets the pace in Chinese GP practice
  • Heat seek Three-peat but Spurs, Pacers top seeds
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Myx TV premieres Asian American ‘docu-series’
  • A nutty finale for ‘Scandal,’ TV’s craziest show
  • EXO postpones release of mini album ‘Overdose’
  • ‘X-men’ filmmaker slams ‘fabricated’ sex attack claims
  • Singer Chris Brown’s bodyguard on trial in DC
  • Business

  • US commerce secretary spells out economic facet of ‘pivot to Asia’
  • Italy sells luxury state cars on eBay
  • Asian shares mostly up in quiet trade
  • Dollar up in Asia on US jobs data, Ukraine deal
  • Barbie doll has a problem
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Editorial cartoon, April 17, 2014
  • A humbler Church
  • Deepest darkness
  • ‘Agnihotra’ for Earth’s health
  • It’s the Holy Week, time to think of others
  • Global Nation

  • Las Vegas ‘Pinoy Pride’ fest hails Filipino heritage
  • Marking Jesus’ journey on Good Friday
  • Filipina accomplice arrested for fake bills in Malaysia
  • DoH denies Filipino nurse no longer positive for MERS virus
  • WHO warns vs spread of MERS-Cov, urges vigilance in taking precautions
  • Marketplace