Inflation rose to 28-month high of 3.4% in March

Higher energy and fuel costs pushed inflation faster at 3.4 percent year-on-year in March, the fastest rate of increase in prices of basic goods in 28 months.

The latest Philippine Statistics Authority (PSA) data showed that headline inflation last month was the highest since November 2014’s 3.7 percent.

Inflation averaged 3.1 percent in the first quarter, near the midpoint of government’s 2-4 percent target range for 2017.

Socioeconomic Planning Secretary Ernesto M. Pernia said the government should move to temper rising commodity prices.

In a text message to reporters, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said the monetary agency’s assessment showed that the path of monthly inflation exhibited upticks until about the third quarter of this year before slowly decelerating to average within the target range.

According to the PSA, prices of alcoholic beverages and tobacco rose 6.4 percent year-on-year in March; clothing and footwear, up 2.9 percent; housing, water, gas, electricity, gas and other fuels, up 4 percent; furnishing, household equipment and routine maintenance of the house, up 2.5 percent, and health products, up 2.8 percent.

State planning agency National Economic and Development Authority also noted food and oil price increases last month as well as a “generally low base” for inflation last year. Headline inflation was 1.1 percent in March last year, with the full-year 2016 average settling at 1.8 percent, below the government target.

Specifically, inflation of nonfood items increased 2.8 percent in March from 2.5 percent a month ago and 0.4 percent a year ago mainly due to faster year-on-year price adjustments of electricity, gas and other fuels [of] 9.3 percent, Neda said. “The hike was partly caused by a 20-day maintenance shutdown in the Malampaya gas field, shutting down three power plants—Ilijan, Sta. Rita and San Lorenzo. The shift to liquid fuel from natural gas pushed up household electricity rate to P9.67 a kilowatt-hour,” Neda explained. BEN O. DE VERA