MANILA, Philippines–Inflation is expected to average at 3.5 percent in the first quarter before it eases further in the second quarter, according to First Metro Investment Corp. and the University of Asia and the Pacific.
FMIC and UA&P said in a joint research that the further deceleration of the rise in consumer prices could occur despite the surge in crude oil prices.
Also, inflation is on a downtrend as food prices are expected to be “quite stable” due to ample supply brought on by good harvests in Luzon and the Visayas, the researchers added.
FMIC and UA&P forecast that inflation will settle at 3.5 percent in March, 3.45 percent in April and 3.6 percent in May.
According to the National Economic and Development Authority, inflation is expected to settle within the full-year target range of between 3 percent and 5 percent.
Socioeconomic Planning Secretary Cayetano W. Paderanga Jr. had said that inflation in the country could be still be affected by abrupt shocks caused by weather-related disturbances as well as wage and oil price increases.
Earlier this month, the National Statistics Office reported that inflation settled at 2.7 percent year-on-year in February, bringing the average for the first two months of the year to 3.3 percent.
Earlier this week, Paderanga said that the government would remain vigilant and mindful of the renewed volatility in the prices of petroleum products even as inflation showed signs of slowing down.
“Petroleum products are considered as input costs to production and in transporting people and goods that ultimately affect headline inflation,” Paderanga said.
“Given the substantial impact of a very high oil price, reasonable and timely implementation of programs and projects are vital in maintaining stable consumer prices while ensuring continuous supply of goods and services,” he added.
Paderanga added that an easing of inflation levels had also been recorded in neighboring Southeast Asian economies.
Inflation in Thailand slowed down in February compared with that of the previous month by 0.03 percentage point to 3.4 percent. In Indonesia, the rate of rise in consumer prices also declined by 0.09 percentage point to 3.6 percent.
In Singapore, inflation eased to 4.8 percent from 5.5 percent, while in Malaysia the rate fell to 2.7 percent from 3 percent.