BSP sees March inflation slowing down to 7.4%-8.2%
MANILA — Inflation in the Philippines may have slowed down in March as the Bangko Sentral ng Pilipinas (BSP) expects the rate of increase in prices of goods and services to have settled within 7.4 percent to 8.2 percent.
This means the BSP is looking at 7.8 percent, the midpoint of its forecast range, which is much lower than the 8.6 percent recorded in February.
The BSP said in a statement that downward price pressures in March were expected to have come from lower prices of petroleum products, fruits and vegetables, chicken and sugar.
On the other hand, possibly helping keep the monthly average inflation high are rising electricity rates in Manila Electric Co.-serviced areas as well as more expensive food items like pork, fish, eggs and rice.
The BSP issued its projection as the Organization for Economic Development (OECD) said that continuing inflationary pressures, which may undermine food security challenges and increase volatility in capital flow, were among the major challenges to robust economic growth in the region this year and in 2024.
In an economic outlook report on Southeast Asia, the OECD said Philippine gross domestic product will grow slower this year at 5.7 percent from 7.6 percent in 2022, before picking up to 6.1 percent in 2024.
Weakened demand
Aside from inflation, economic growth in the region is meeting resistance from the global economic slowdown in the face of uncertainty and weakened demand for Emerging Asian goods.
The OECD also flagged supply-side bottlenecks that appeared during the pandemic and still linger, as well as new ones caused by global uncertainty.
“The current inflationary episode in Emerging Asia exhibits several characteristics that differ from previous episodes,” the OECD said.
In Emerging Asia, inflation is not particularly high by global standards but is showing signs of increasing in some countries. This episode is “very long and persistent.”
The OECD said that uncertainty over the duration of this episode could lead to negative perspectives among households.
“Monetary authorities face the challenge of striking a balance between taming inflation and safeguarding economic recovery,” it added. INQ
