Inflation rises to 3.4% in March

MANILA, Philippines – Inflation continues to rise this year due to higher electricity and gas prices, among others, according to the National Economic and Development Authority (NEDA).

Data released by NEDA on Wednesday, April 5, showed that inflation rose to 3.4% in March, up from the 3.3% seen in February.

It is also the fastest level that inflation has risen since November 2014, but still fell within the government’s target for 2017 and within market expectations for the month.

The first 3 months of 2017 have seen the Philippines’ inflation rate rising, which NEDA said was partly due to recent hikes in food and oil prices and also owing to a generally low base in 2016. Inflation averaged 1.8% for 2016.

“Upward risks to inflation remain, but the overall outlook continues to be within government’s 2.0-4.0% target range for this year and next,” said Socioeconomic Planning Secretary Ernesto Pernia.

Gas, electricity prices up

Non-food inflation accelerated to 2.8% in March from 2.5% in February this year, and from 0.4% in March 2016.

NEDA attributed this to the faster year-on-year price adjustments of electricity, gas, and other fuels, which increased to 9.3%.

The agency also noted that the hike was partly caused by a 20-day maintenance shutdown of the Malampaya gas field. The shutdown affected 3 power plants – Ilijan, Sta Rita, and San Lorenzo.

The shift to liquid fuel from natural gas pushed up household electricity rates to P9.67 per kilowatt hour.

“Higher electricity rates are expected to persist in the next two months as the Energy Regulatory Commission (ERC) will spread the additional cost from the use of liquid fuel, which is more expensive than natural gas, until May 2017,” Pernia said.

Food inflation, meanwhile, slowed slightly to 4.2% in March from 4.3% in February due to slower price adjustments in fish, fruits, vegetables, sugar, jam, honey, chocolate and confectionery, and other food products.

Prices of the staple rice, however, and meat accelerated by 2.3% and 3.2%, respectively.

Pernia noted that possible adjustments in transportation fares and electricity rates in the coming months could exert upward pressure on prices.

He added that the continued weakening of the Philippine peso against the US dollar may also push up prices of basic commodities and services.

Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr earlier said that he expects inflation to continue rising until the 3rd quarter of 2017, before eventually settling within the 4% upper range of the target. – Rappler.com