Philippine Inflation Accelerates in March due to Soaring Rice Prices
Published on: April 5, 2024.
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Philippine Inflation Accelerates in March as Rice Prices Soar
Inflation in the Philippines rose for the second consecutive month in March, driven by a sharp increase in rice prices. The country’s consumer price index (CPI) grew by 3.7% compared to the previous year, according to the statistics agency. This is higher than the rate of 3.4% recorded in the previous month.
Economists had predicted a slightly higher inflation rate of 3.8% for March, falling within the central bank’s forecast range of 3.4% to 4.2%. However, the actual figure still raises concerns due to the rising price of rice, a staple food in the Philippines.
The component for rice saw a significant increase of 24.4% in March, the highest in 15 years. This accounted for nearly half of the overall inflation rate for the month. In comparison, the previous highest increase for rice was recorded in February 2009 at 24.6%.
Food inflation as a whole reached 5.7%, the highest since November 2023. However, core inflation, which excludes volatile food and energy items, eased slightly from 3.6% in February to 3.4% in March.
The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, has indicated that the risks to the inflation outlook continue to be tilted towards higher prices. The Monetary Board will review its policy settings in response to these inflation concerns in an upcoming meeting.
Despite the lower-than-expected headline inflation figure, experts believe that the BSP will maintain its benchmark interest rate at 6.50% to address the rising food prices. Robert Dan Roces, chief economist at Security Bank in Manila, emphasized the ongoing concern over increasing food costs and its implications for the economy.
In February, the BSP chose to keep the benchmark interest rate unchanged for the third consecutive meeting in response to the prevailing economic conditions.
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