Poll: March inflation picked up to 3.8%

SHARP OIL PRICE increases driven by supply disruptions from the Middle East war, along with pricier rice, may have pushed Philippine inflation to its fastest pace in nearly two years, analysts said.

- By Katherine K. Chan Reporter

A Business World poll of 18 analysts yielded a median estimate of 3.8% for the consumer price index in March, accelerating from the 2.4% in February and 1.8% a year ago.

This is near the upper end of the Bangko Sentral ng Pilipinas' (BSP) 3.1%-3.9% forecast for the month.

If realized, the headline print would be the fastest in 20 months or since 4.4% seen in July 2024.

This would also mark the third straight month that inflation settled within the central bank's target.

The Philippine Statistics Authority (PSA) will release the March inflation data on Tuesday, April 7.

"I'm looking at 3.8% for the March inflation print, with most of the acceleration from 2.4% in February coming from transport deflation coming swiftly to an end on the back of the major fuel price hikes seen in recent weeks," Miguel Chanco, chief Emerging Asia economist at Pantheon Macroeconomics, said in an email.

He said transport inflation likely quickened to 8.5% last month from -0.3% in February.

"On top of this, we're expecting a further rise in food inflation where low base effects are still doing a lot of heavy lifting," Mr. Chanco added.

In March, local fuel retailers raised pump prices by double digits as the US-Iran war sent crude oil prices soaring. Pump price adjustments stood at a net increase of up to P43.50 a liter for gasoline, P67.35 per liter for diesel and P70.90 per liter for kerosene last month.

The Philippines is a net importer of crude oil and sources most of its crude oil as well as liquefied petroleum gas supply from the Middle East. This makes the country extremely vulnerable to global crude price swings.

Analysts also attributed the faster headline clip to higher rice prices and electricity rates during the month.