MANILA (UPDATE) - Inflation for the month of March quickened as prices of fuel and other basic commodities increased, the state statistics bureau said Tuesday.

The consumer price index rose 4 percent, faster than the 3 percent rise in January and February, the Philippine Statistics Authority said in a virtual briefing.

This figure was above the government's target range of 2 to 4 percent, but within the Bangko Sentral ng Pilipinas' forecast of 3.3 to 4.1 percent.

For the first 3 months of the year, inflation averaged 3.4 percent.

Prices of goods, especially petroleum products, have been rising in recent weeks due to the impact of Russia's invasion of Ukraine, which pushed up world crude oil prices.

National Statistician Dennis Mapa said the main contributors to the faster inflation rate were food and non-alcoholic beverages, especially meat and fish.

Electricity rates had also risen 18 percent, LPG increased by 26.5 percent, and transport costs went up 10. 3 percent.

Mapa noted that gasoline prices were up 36.7 percent and diesel up by 58 percent, from the same month last year.

Since the start of the year, pump prices have increased by P16.10/liter for gasoline, P26/liter for diesel and P24.10/liter for kerosene, based on the latest price adjustments and the Department of Energy’s oil monitor.

The BSP earlier warned that inflation could rise in the coming months due to the impact of Russia's invasion of Ukraine. The central bank has raised its inflation forecast for 2022 and 2023 to 4.3 percent and 3.6 percent, respectively, from 3.7 percent and 3.3 percent.

In a statement, the BSP said the conflict between Russia and Ukraine could affect the country's economic growth prospects through a slower world GDP growth, higher crude oil prices, higher non-oil prices and potential second-round effects on inflation through transport fares, wages and food prices.

"The economic consequences of Russia’s invasion of Ukraine have become a significant headwind in global economic recovery...Among all these, the main channel through which the Russia-Ukraine war could affect the Philippines is through higher oil prices," the central bank said

"Under these circumstances, the BSP will closely monitor the emerging risks to the outlook for inflation and growth, and remain vigilant against possible second-round effects from supply-side pressures or any shifts in the public’s inflation expectations," it added.

The BSP said it has a "wide arsenal" of policy instruments to respond to potential impact of external shocks.

Despite this, the BSP has kept its benchmark rate at a record low of 2 percent. Analysts are expecting rate hikes this year to as much as 75-basis points.

Socioeconomic Planning Secretary Karl Kendrick Chua said the government has been monitoring the impact of the Russia-Ukraine crisis. The government has also implemented interventions to manage supply and prices of key commodities, he added.

Affected farmers, as well as public utility vehicle drivers and operators, have received fuel subsidies while 50 percent of the poorest household will receive unconditional cash transfers to cushion the impact of rising prices, Chua said.

"The government stands ready to support consumers, commuters, public transport drivers and operators, and agricultural producers to ease the impact of high oil and commodity prices," Chua said.

"As COVID-19 cases subside, we also aim to move the entire country to alert level 1 to provide more opportunities for Filipinos to earn and provide for their families amid inflationary pressures,” he added.

• BSP keeps benchmark interest rate at 2 percent
• Inflation steady at 3 percent in February
• Bangko Sentral likely to begin monetary policy 'normalization' in second half of 2022: Diokno

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