Inflation in the Philippines may have declined to a near five-year low in March, according to the Bangko Sentral ng Pilipinas (BSP), following lower prices of key food items, especially rice, and a stronger Peso.
Ahead of the Philippine Statistics Authority's data release on Friday, the BSP forecasted that consumer price growth would likely fall within the 1.7% to 2.5% range, which is a broad spread from February's 2.1% result.
The lower end of the forecast is below the 1.9% recorded in September of last year, which was the lowest since May 2020’s 1.6% and also the last time the inflation rate fell below the central bank's 2.0% to 4.0% target.
Analysts surveyed by The Manila Times anticipate that inflation for March reached 2.0%.
“Upward price pressures for the month emanate from higher electricity rates and higher prices for fish and meat,” according to a central bank statement.
“Nonetheless, these are expected to be offset by lower prices of rice, fruits, and vegetables, owing to favourable domestic supply conditions as well as the Peso appreciation,” it went on to add.
February's inflation result was lower than anticipated, and another slowdown in March could prompt the BSP to consider resuming interest rate cuts during next week's policy meeting.
The bank on Monday said it would “continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment.”
BSP Governor Eli Remolona Jr. has indicated a “good chance” that the central bank's Monetary Board will implement a 25-basis point (bps) rate cut on 10th April.
The central bank’s policy rate is currently at 5.75% after three 25-basis point cuts last year. In February, the Monetary Board unexpectedly decided to keep interest rates unchanged, citing uncertainties surrounding the inflation and economic growth outlook.