March inflation higher at 3.7% but still within gov’t target range

MANILA, Philippines — Inflation picked up to 3.7 percent year-on-year in March, from 3.4 percent in February, due to higher prices of key food items like vegetables, meat and rice, the Philippine Statistics Authority (PSA) reported Friday,

While there was an uptick in March, inflation nevertheless stayed within the 2 to 4 percent target range of the Bangko Sentral ng Pilipinas (BSP) for four straight months.

The faster inflation would likely convince the BSP to stay hawkish—or keep rates higher—for much longer to avoid upsetting inflation expectations.

READ: Philippine central bank governor rules out easing rates ‘soon’

At its meeting in February, the Monetary Board left its key rate unchanged at 6.5 percent—the highest in almost 17 years—in what the BSP called a “prudent” move amid persistent risks to the inflation outlook.

The BSP had said inflation would ease in the first quarter before overshooting the target anew in the second quarter as favorable base effects fade. Average price hike is projected to return to the target band in the third quarter to average 3.6 percent this year.