Philippine inflation decelerated to 1.8 percent in March, its slowest pace since the 1.6 percent registered in May 2020 when the economic activities was challenged by the COVID-19 pandemic-related lockdowns.
This decline, down from 2.1 percent in February, was largely driven by lower food prices, particularly rice, which saw a significant annual decrease.
Average inflation in the first quarter stood at 2.2 percent, at the bottom end of the Bangko Sentral ng Pilipinas’ target range of 2.0 percent to 4.0 percent. Inflation in March was also at the lower end of the BSP’s forecast of 1.7 percent to 2.5 percent.
Food inflation, which accounts for a substantial portion of the overall inflation, eased to 2.3 percent in March from 2.6 percent the previous month.
A notable contributor was rice, which experienced a sharper decline of 7.7 percent, compared to a smaller 4.9 percent decrease in February. The reduction in rice prices, a staple in Filipino households, helped bring down food inflation. The contraction is rice prices was the sharpest since March 2020, when it was at 8.4 percent.
Other food groups, such as meat and vegetables, also saw slower price increases, further driving down overall inflation.
In addition to food, the transport sector’s inflation rate fell sharply, from a 0.2 percent decrease in February to a 1.1 percent drop in March. The decline in fuel prices contributed significantly to this downturn. The inflation for restaurants and accommodation services also slowed to 2.3 percent, down from 2.8 percent the previous month.
Housing and utilities, which are typically significant contributors to inflation, remained stable, with only a slight increase in costs. Conversely, sectors like alcoholic beverages and tobacco experienced slight upticks.
The Philippines’ core inflation, which excludes volatile food and energy items, also eased to 2.2 percent, down from 2.4 percent in February. With the March figure coming in lower than last year’s 3.7 percent, the country appears to be on a path to more stable prices, supporting the government’s broader efforts to control inflation and ensure food security.
For the bottom 30 percent income household, March inflation slowed to 1.1 percent from 1.5 percent in February and 4.6 percent in March last year. Rice prices account for P18 for every P100 spent by poorer Filipino families.
