The Manila Times

BSP: March inflation could fall to 7.4-8.2%

BY NIÑA MYKA PAULINE ARCEO

INFLATION could have markedly slowed in March as fuel and food prices fell, the Bangko Sentral ng Pilipinas (BSP) said on Friday.

Following an easing to 8.6 percent last month from January’s 14-year high of 8.7 percent, the central bank forecast a deceleration to 7.4 to 8.2 percent.

“The recent rollback in domestic petroleum prices, lower prices of fruits and vegetables, as well as the decline in chicken and sugar prices, are expected to contribute to easing price pressures during the month,” it said in a statement.

Upward price pressures for the month, meanwhile, could have come from higher electricity rates in areas served by Manila Electric Co. as well as price rises for other key food items, such as pork, fish, eggs and rice.

“Going forward, the BSP remains prepared to respond appropriately to continuing inflation risks in line with its datadependent approach to monetary policy formulation,” the central bank said.

Inflation results for March are scheduled to be released by the Philippine Statistics Authority on Wednesday, April 5.

February’s easing had prompted a revision of the average inflation forecasts for this year and the next to 6.0 percent and 2.9 percent, respectively, from 6.1 percent and 3.1 percent.

Key interest rates were still raised by 25 basis points (bps) this month in a bid to anchor inflation expectations and achieve a return to the 2.0- to 4.0-percent inflation target.

Monetary authorities started hiking interest rates in May last year after inflation surged following Russia’s invasion of Ukraine.

Adjustments to date have totaled 425 bps, which raised the BSP policy rate to 6.25 percent — the highest since November 28.

Analysts expect the BSP’s policymaking Monetary Board to increase rates by another 25 bps in May before calling a halt to the tightening spree.

Last week, central bank Governor Felipe Medalla told a US business channel that they had “done almost enough” to tame stubborn inflation.

“We believe we have done almost enough and are confident that nonmonetary interventions by the national government will complement our efforts and help bring inflation under control,” he said.

Finance Secretary Benjamin Diokno, meanwhile, this week said that the BSP was leaning toward a pause this May.

“In my view, the monetary authorities have done enough. And monetary policy is not the only game in town,” he said.

“At this juncture, I think nonmonetary measures to ease inflation could address the problem more effectively.”

Commenting on the forecast, Rizal Commercial Banking Corp. chief economist Michael Ricafort said inflation was likely on the way down as some food prices had started to ease following better weather conditions.

“There is a chance that year-onyear inflation could have already reached the peak in 1Q (first quarter) 2023, particularly the 8.7 percent in January 2023,” he said.

“[Inflation] could start to ease gradually thereafter as seen lately and could even ease year on year significantly, especially starting March 2023 into the second half of 2023 due to higher base/denominator effects.”

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2023-04-01T07:00:00.0000000Z

2023-04-01T07:00:00.0000000Z

https://manilatimes.pressreader.com/article/281818583094460

The Manila Times