BSP sees March inflation at 1.7%-2.5%

Headline inflation likely settled within a range of 1.7% to 2.5% in March, the Bangko Sentral ng Pilipinas (BSP) said on Monday.

If realized, the BSP’s forecast would be slower than the 3.7% inflation print in March 2024.

At the upper end of the BSP forecast, inflation likely accelerated from 2.1% in February.

The low end of the forecast showed inflation may have slowed below 2% for the first time since the 1.9% print in September 2024. It could also mark the slowest inflation since 1.6% in May 2020.

A BusinessWorld poll of 18 analysts conducted last week yielded a median estimate of 2% for the March consumer price index.

March inflation data will be released on April 4.

“Upward price pressures for the month emanate from higher electricity rates and higher prices for fish and meat,” the BSP said in a statement.

In March, Manila Electric Co. (Meralco) raised the overall rate by P0.2639 per kilowatt-hour (kWh) to P12.2901 per kWh from P12.0262 per kWh in February.

The Philippine Statistics Authority said the price of a kilo of round scad (galunggong) averaged PHP 235.26 in early March, slightly higher than the PHP 226.43 in the previous month. The price of fresh pork belly (liempo) rose to PHP 384.08 per kilo in early March from PHP 375.02 a month earlier.

However, the BSP noted there was a drop in prices of rice and vegetables in March.

“Nonetheless, these are expected to be offset by lower prices of rice, fruits, and vegetables, owing to favorable domestic supply conditions as well as the peso appreciation,” it said.

Rice prices have been on a downtrend due to government interventions and lower global prices. In February, rice inflation decreased to 4.9% from the 2.3% drop in January.

The government had slashed tariffs on rice imports to 15% starting July 2024. The Department of Agriculture (DA) declared a food security emergency on rice, which authorized the National Food Authority to release buffer stocks at subsidized prices.

Starting March 1, the DA also further lowered the maximum suggested retail price of 5% broken imported rice to PHP 49 per kilo from PHP 52 per kilo previously. The MRSP was further reduced to PHP 45 per kilo starting March 31.

“Going forward, the Monetary Board will continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment,” the BSP said.

The BSP’s baseline forecasts for inflation are at 3.5% for 2025 to 2026. Accounting for risks, inflation could reach 3.7% in 2026.

The BSP last month opted to keep its key rate steady at 5.75% amid global trade uncertainties.

However, BSP Governor Eli M. Remolona, Jr. has said they are still on an easing cycle, signaling the possibility of a 25-basis-point cut at the Monetary Board’s policy-setting meeting on April 10. — A.R.A. Inosante