Prices of consumer goods eased sharply in March from the year-earlier period, slowing headline inflation down to 7.6 percent from 8.6 percent in February, the Philippine Statistics Authority said Wednesday.
Headline inflation in March is the slowest since October last year, when it stood at 7.7 percent.
But core inflation, which excludes volatile food and energy items, and tracked by the central bank for policy-setting purposes, continued to accelerate and rose to 8 percent in March—the highest since 1999–from 7.8 percent in February. Core inflation average 7.7 percent in the first quarter.
National Statistician Dennis Mapa told a news conference Wednesday to announce the inflation data that elevated cost of services is keeping core inflation high. He said it was too early to determine if the central bank’s policy tightening has already contributed to the deceleration in headline inflation.
Rising core inflation has kept the Bangko Sentral ng Pilipinas hawkish and just last month raised interest rates further. The BSP raised its closely-watched interest rates to 6.25 percent, the highest since November 2008.
Some economic managers have warned that continuing increase in domestic interest rates could undermine economic growth.
Mapa said the main contributors to slower inflation in March are the deceleration in the year-on-year increases in the price of vegetables, meat, sugar and electricity as well as contraction in the prices of gasoline, diesel and cooking gas prices.
Headline inflation averaged 8.3 percent in the first three months of 2023.
Mapa said that for the bottom 30% of the population, headline inflation eased to 8.8% in March from 9.7% February, and averaged 9.4% in the first three months of this year. The basket of consumer goods for the bottom 30% has a higher weighting for food than the ordinary household.
