March inflation hovers at upper target – survey

Most economists are convinced that inflation rose for the second consecutive month in March, with some projecting it to breach the two to four percent target range of the Bangko Sentral ng Pilipinas BSP), amid higher food prices.

- KEISHA TA-ASAN

HSBC Global Research ASEAN economist Aris Dacanay said inflation likely rose to 3.8 percent in March, mainly due to rising food prices. This was after the consumer price index (CPI) picked up to 3.4 percent in February from a three-year low of 2.8 percent in January.

"Not only did retail rice prices remain at elevated levels, but rice prices increased further in March due to the ongoing risks of El Niño and the global supply crunch caused by trade curbs in India, the largest rice exporter in the world," he said.

ING Bank senior economist Nicholas Mapa said inflation last month likely settled at 3.8 percent, mainly driven by rice inflation as well as higher costs of utilities and transport.

"Rice inflation is projected to hit 24 percent year-on-year, and given its hefty weight in the CPI basket, will continue to push up inflation closer to the upper end of the BSP inflation target," Mapa said.

Moody's Analytics economist Sarah Tan said headline inflation may have risen to as high as 3.9 percent in March, as the El Niño weather event damaged crops in several parts of the country including rice harvests in Mansalay, Oriental Mindoro..