March inflation at 15-month low

Inflation further eased to a 15-month low of 3.3 percent in March as increases in prices of food and beverages continued to slow down.

A Philippine Statistics Authority (PSA) report Friday showed that the year-on-year rate of increase in prices of basic commodities last month was the lowest since the 2.9 percent posted in December 2017.

PSA data showed that price increases in seven commodity groups decelerated last March, namely: food and non-alcoholic beverages; alcoholic beverages and tobacco; housing, water, electricity, gas and other fuels; furnishing, household equipment and routine maintenance of the house; health; communication, and restaurant and miscellaneous goods and services.

In the case of the heavily weighted food and non-alcoholic beverages index, the 3.4 percent year-on-year increase in March was the slowest so far this year.

The food index also slowed to 3.1 percent from 4.2 percent a month ago and 5.7 percent a year ago as corn prices dropped while those of rice, fish, oils and fats, fruits, vegetables and sweets like sugar, jam, honey, chocolate and confectionary recorded slower inflation.

Average prices in March inched up 0.1 percent from February levels, the same month-on-month rise recorded a month ago.

In the first quarter, headline inflation averaged 3.8 percent, within the government’s 3 to 4 percent target range.

In Metro Manila, end-March inflation stood at 3.8 percent; outside Metro Manila, the three-month rate was a slightly higher 3.9 percent.

In a statement, the state planning agency National Economic and Development Authority (Neda) said that while the government welcomed slowing inflation, it has to be on its toes against upward price risks.

“Despite the further easing of headline inflation in March, the government will remain vigilant for risks such as the El Niño phenomenon, higher rates of electricity and water, and the volatility in global oil prices,” Neda Undersecretary Adoracion M. Navarro said.

With rice importation liberalized, Neda expects domestic prices of the Filipino staple food to decline, Navarro said.

But the Neda official said the prolonged dry spell due to El Niño could jack up food prices and cost of utilities.

Citing the latest report of the weather bureau Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa), Neda said “mild to moderate El Niño conditions are estimated to occur from March to October and will weaken in the last three months of the year.”

“To ensure there are enough interventions that mitigate the adverse effects of El Niño, the inter-agency El Niño Task Force (ENTF), led by Neda, will be reactivated as recommended by the National Disaster Risk Reduction and Management Council. The ENTF will revisit the 2015 Roadmap for Addressing the Impacts of El Niño (RAIN), which aims to lessen the impact of El Niño on food and energy security, health, and safety. It will be expanded to include water security among areas of concern,” according to Neda.