INFLATION or the pace of increase in prices of basic goods was likely faster in March than the four-month low of 0.9 percent last February mainly as fuel and rice prices inched up, economists said.
“We are looking at 1 percent [as] lower LPG (liquefied petroleum gas), food and transport costs may outweigh higher pump prices in March,” Bank of the Philippine Islands lead economist Emilio Neri Jr. said. The government will release the inflation figure for March on Tuesday.
“Our forecast for March is at 1.1 percent on the back of higher petroleum and rice prices,” said Metropolitan Bank and Trust Co. research analyst Pauline May Ann E. Revillas.
Banco De Oro Unibank Inc. chief market strategist Jonathan L. Ravelas said he expected inflation last month at 1.2 percent.
“We expect slightly higher inflation of 1.3 percent year-on-year. Prices of petroleum and certain food items were raised in March, while food prices overall remain largely stable,” said Jeff Ng, Standard Chartered Bank economist for Asia.
“However, inflation—excluding food and energy—remains muted, indicating little persistent inflationary pressure at the moment,” Ng added, noting that inflation (excluding food and energy) slowed to 1.7 percent year-on-year in February from 1.9 percent last January.
“We expect inflation to edge up over the course of 2016, closer to the central bank’s target of 2-4 percent. We forecast 2016 inflation of 1.8 percent versus 1.4 percent in 2015. Benign inflation should allow Bangko Sentral ng Pilipinas BSP to maintain its monetary policy stance until it introduces the interest rate corridor (IRC) in the second quarter this year,” according to Ng.
The BSP earlier said it was on track to implement the IRC within the second quarter, a move that will further boost domestic liquidity. The new corridor will involve the establishment of weekly auctions for term deposits. Ben O. de Vera