HEADLINE inflation increased to 4.0 percent year-on-year in March 2022, higher than the previous month’s rate of 3.0 percent and near the upper end of the BSP’s month-ahead forecast of 3.3-4.1 percent for March.
The resulting year-to-date average inflation of 3.4 percent for Q1 2022 is within the Government’s average inflation target range of 2.0-4.0 percent for the year. On a month-on-month seasonally adjusted basis, inflation also increased to 1.0 percent in March from 0.3 percent in February.
Inflation pressures in March were driven largely by higher price increases of food items combined with the continued rise in energy-related inflation. Food inflation went up as most food commodities, particularly meat, fish, as well as sugar, confectionery and desserts posted higher inflation rates in March compared to the previous month.
Year-on-year corn inflation also remained elevated during the month. At the same time, energy-related inflation increased further due to higher electricity rates and upward adjustments in domestic petroleum prices. Likewise, inflation for restaurants and accommodation services rose, which also contributed to the higher non-food inflation.
The latest inflation reading is in line with the BSP’s baseline projections, which show inflation averaging above the target range in 2022 due largely to higher global crude oil prices before reverting within the target band in 2023. For this reason, the BSP continues to support the timely implementation of direct non-monetary measures by the government that will mitigate the impact of higher global commodity prices on consumer prices.
Meanwhile, the BSP is keeping a watchful eye on emerging developments to ensure that the monetary policy stance remains in line with our primary mandate to promote price stability. The BSP is prepared to take preemptive action as needed if inflation expectations become at risk of becoming disanchored.
Presidential Communications Secretary and Acting Presidential spokesperson Martin Andanar said “Our economic managers continue to keep a tight watch over inflation as it hits 4% in March 2022. They attribute this upward trend in transport, gas, other fuels among others. Having said this, we will not relax in our efforts and will work twice as hard to address the national issue of higher prices.”
