Inflation up 1.1% in March
MANILA, Philippines – Inflation rose 1.1% in March 2016 from 0.9% in February due to increases in food and oil prices, said the National Economic and Development Authority (NEDA) on Tuesday, April 5.
Inflation in food items went up to 1.6% in March from 1.5% the previous month, amid higher prices for meat (1.2% from 0.9%), fish (2.8% from 2.3%), milk, cheese, and eggs (1.2% from 1.1%).
Despite the El Niño phenomenon, rice prices remain lower (-1.7% in March from -2.0% in February) and have been declining consistently since October 2015, Socioeconomic Planning Secretary Emmanuel Esguerra noted in a statement.
The price of vegetables, while remaining high since November 2015, has shown a gradual downward trend after peaking in January 2016. It declined by 2.9% in March 2016 from the previous month, for a total decline of 7.8% since the beginning of the year.
"We have been closely monitoring price movements and looking at factors that influence commodity prices, especially food consumed by the poor," said Esguerra.
Meanwhile, domestic oil prices rose – gasoline by 5.03%, liquefied petroleum gas (LPG) by 0.58%, diesel by 8.6%, and kerosene by 7.06%.
These increases were the result of cuts in production and exploration of international energy firms due to the continued soft oil prices, according to NEDA.
"Outlook for oil prices in the medium term remains modest given a backdrop of strong world crude oil supply growth and weak global demand," Esguerra said.
March's inflation fell within the Bangko Sentral ng Pilipinas (BSP) forecast of 0.6% to 1.4% for the period.
"In the first 3 months of 2016, inflation remained relatively low and stable in line with expectations over the policy horizon, which is likely to support consumption growth," said Esguerra.
Manageable inflation was also a factor in the BSP Monetary Board's decision to maintain key interest rates following its latest meeting in March.
The Development Budget Coordination Committee targets inflation at 2.0% to 4.0% for 2016.
Despite the manageable inflation environment, Esguerra said that the government needs to remain vigilant.
"Although El Niño has entered its weakening stage, the risk of higher food prices remains given the onset of the summer season. Thus, we must also monitor our rice supply and importation to avoid supply disruptions which could result in volatilities in the price of rice," he said.
The NEDA chief added that the Roadmap for Addressing the Impact of El Niño (RAIN) needs to be accelerated and sustained, particularly in the areas that have declared a state of calamity.
RAIN aims to ensure food security by increasing the supply of food, keeping food prices stable, and implementing measures to protect farmers' incomes.
Esguerra also pointed out that the government will need to prepare for La Niña, which is forecast to bring higher-than-normal volume of rainfall in the Philippines in the latter half of the year. – Rappler.com