Inflation slowed down to 4.5% in March —PSA

Inflation or the rate of increase in the prices of goods and services eased slightly in March due to slower movement in the prices of food commodities, the Philippine Statistics Authority (PSA) reported on Tuesday.

At a virtual press conference, PSA chief and National Statistician Claire Dennis Mapa said inflation clocked in at 4.5% in March, slower than the 4.7% rate recorded in February but faster than 2.5% in March 2020.

This brings the year-to-date inflation at 4.5%, still exceeding the government’s target band of 2% to 4%.

Last month’s figures also fell within the Bangko Sentral ng Pilipinas’ (BSP) forecast range of 4.2% to 5%.

“Ang pangunahing dahilan ng pagbaba ng antas ng inflation nitong Marso 2021 ay ang mas mabagal na paggalaw ng presyo ng Food and Non-Alcoholic Beverages,” Mapa said.

(The main reason for the lower inflation in March 2021 is the slower movement in the prices of Food and Non-Alcoholic Beverages.)

Mapa said the heavy-weighted Food and Non-Alcoholic Beverages index contributed 91.6% to the downtrend in prices in March.

The lower inflation in food commodities was due to slower movement in the prices of vegetables, fruits, and fish.

Mapa said vegetables, particularly garlic, posted an inflation of 8.3% from 16.7% in February. On the other hand, fruits, particularly apples, saw an inflation of 3.9% from 7.4% in the prior month.

Fish, particularly dilis (anchovy) and tulingan (mackerel tuna), recorded an inflation of 4.9% from 5.1% in February.

“We can say the good weather contributed to the slower movement in the prices of vegetables, fruits, and fish,” Mapa said.

The slowdown in vegetables, fruits, and fish, however, was offset by the still higher inflation in meat, particularly pork, which posted an inflation of 20.9% in March from 20.7% in February, still due to supply-side constraints amid the African swine fever crisis which impacted the hog industry.

Mapa said prices of beef and chicken also followed the trend in pork prices.

Among commodity groups the following posted slower inflation in March:

• Food and Non-Alcoholic Beverages at 5.8% from 6.7%
• Alcoholic Beverages and Tobacco at 12.1% from 12.2%
• Furnishing, Household Equipment and Routine Maintenance of the House at 1.9% from 2.4%
• Communication at 0.2% from 0.3%
• Restaurant and Miscellaneous Goods and Services at 3.1% from 3.2%

Meanwhile, the Transport index posted an inflation increase at 13.8% in March from 10.4% in February.

Major contributors to the Transport index are tricycle fare with 47.5% inflation, petroleum and fuels with 11.9% inflation, and jeepney fare with 6.3% inflation.

“Bumagal naman ang pagbaba ng presyo ng Recreation and Culture na may -0.6% inflation nitong Marso 2021, mula sa -0.7% inflation noong Pebrero 2021,” Mapa said.

(The prices in Recreation and Culture, meanwhile, slowed down at -0.6% inflation in March 2021, from -0.7% inflation in February 2021.)

In a message to reporters, BSP Governor Benjamin Diokno said the March inflation outturn “is consistent with expectations that inflation could settle above the high end of the target in 2021, reflecting the impact of supply side constraints on domestic prices of key food commodities, such as meat, as well as the continuing rise in world oil prices.”

“Nevertheless, inflation is still seen to return to within the target band in 2022 as supply side influences subside. At the same time, timely and effective implementation of direct measures by the National Government could contribute to easing price pressures,” he added.

“Tighter domestic supply of meat products and improved global economic activity could lend further upward pressures on inflation. However, ongoing pandemic also continues to pose downside risks to the inflation outlook, as the recent surge in virus infections and challenges over mass vaccination programs continue to temper prospects for domestic demand.”

Inflation in Metro Manila, outside NCR

Inflation in the National Capital Region (NCR) followed the national trend as it slowed down to 3.7% from 4.1% in February.

The lower NCR inflation was also due to slower movements in Food and Non-Alcoholic Beverages with 5.7% inflation from 7.1%; followed by Housing, Water, Electricity, Gas, and Other Fuels with an inflation of 0.3% from 1.2%.

In areas outside NCR, inflation also slipped to 4.7% from 4.8% in February due to slowdown in Food and Non-Alcoholic Beverages at 5.9% from 6.6%.

Six regions in areas outside exhibited lower inflation during the month.

The lowest inflation among the regions in March remained in Region VII (Central Visayas) at 1.5%, while the highest was in Region V (Bicol Region) at 8%.

Inflation for bottom 30%

For the bottom 30% income households, inflation remained at 5.5% in March.

“Ang magkaparehong antas ng inflation para sa bottom 30% income households nitong Marso 2021 at noong Pebrero 2021 ay dahil sa magkakaibang paggalaw ng presyo sa mga commodity groups nitong Marso 2021,” Mapa said.

(The same level of inflation for the bottom 30% income households in March 2021 and February 2021 is due to varying movements in the prices of commodity groups in March 2021.)

Higher inflation were registered in the indices of the following commodity groups during the month:

• Clothing and footwear, 2.5%
• Housing, water, electricity, gas, and other fuels, 2.0%
• Transport, 20.4%
• Restaurant and miscellaneous goods and services, 4.4%

Slower annual increases, meanwhile, were seen in the indices of food and non-alcoholic beverages at 5.3%; alcoholic beverages and tobacco at 13.2%; and health at 2.7%.

Moreover, the index of recreation and culture exhibited an annual drop of -0.3% in Marc from a zero percent annual growth in the previous month.  —KBK, GMA News