Inflation cools to 7.6 percent in March

Jessica Fenol and Warren De Guzman, ABS-CBN News

Posted at Apr 05 2023 09:11 AM | Updated as of Apr 05 2023 02:46 PM

People buy various meat and produce at the Agora Public Market in San Juan City on February 21, 2023. Maria Tan, ABS-CBN News
People buy various meat and produce at the Agora Public Market in San Juan City on February 21, 2023. Maria Tan, ABS-CBN News

MANILA (UPDATE) - Inflation in March decelerated partly due to the easing in food and non-alcoholic beverages as well as in transport costs, the state statistics bureau said on Wednesday.

The consumer price index rose 7.6 percent last month, slower than the 8.6 percent in February, data from the Philippine Statistics Authority showed. 

March inflation across the country. Chart: PSA
March inflation across the country. Chart: PSA

National Statistician Dennis Mapa said the continued downward trend was due to the lower inflation rate of food and non-alcoholic beverages at 9.3 percent in March from 10.8 percent the previous month.

Transport also contributed to the decline with an inflation rate of 5.3 percent from 9 percent, the PSA said. Housing, water, electricity, gas and other fuels also recorded a lower 7.6 percent inflation for the month from 8.6 percent in February, it added.

The March inflation was within the Bangko Sentral ng Pilipinas' 7.4 to 8.2 percent estimate. However, the figure remains above the government's 2 to 4 percent target range. 

For the first quarter of 2023, the average headline inflation was at 8.3 percent, data showed. 


Core inflation, which strips out volatile food and fuel items, accelerated to 8 percent, from 7.8 percent the previous month, the PSA said. 

When asked if inflation has peaked, Mapa said it is going down but noted the rise in core inflation. For some items, prices are on a downward trend, but rising for others, he said.

"It seems that it’s now going down starting January, pababa na siya. Ang challenge dito we want to bring it down further but the core inflation is higher," Mapa said. 

Due to the higher core inflation, the BSP might implement 2 more rate hikes in the coming months, EMBM Consultant on Financial Services and Strategy Jonas Ravelas told ANC. 

"I think the key issue here is, hopefully, we get to see below 7 percent for April. The only thing is that core inflation remains high at 8 percent. I don’t think the BSP is finished with its rate hikes although it could be a smaller rate hike. Probably we could see another 2 more hikes, closer to 7 percent," Ravelas said.

Key policy rate was raised to 6.25 percent in March. 

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The BSP expects inflation to remain above average at 6 percent in 2023 before easing within the 2 to 4 percent target range in 2024.

On Tuesday, an Asian Development Bank report said it expected the Philippine economy to moderately grow by 6 percent in 2023 despite elevated inflation. 

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan said keeping prices in check remains a priority for the government.

"Protecting the purchasing power of Filipinos, especially the most vulnerable sectors of the economy, is one of the top priorities of the administration, which we have also laid out in the Philippine Development Plan 2023-2028. We are committed to provide policy advice and anticipatory recommendations that are supported by data to manage inflation and protect the Filipino families,” he said.

Malacañang had said President Ferdinand R. Marcos Jr. approved in March the creation of the Inter-Agency Committee on Inflation and Market Outlook to craft strategies involving food and energy security. 

While doing this, the advisory body is also tasked to balance other interests in domestic food producers and consumers, the Presidential Communications Office said. 

During their first meeting, the committee discussed "[established] coordination mechanisms for data gathering, assessment, and monitoring of supply and demand conditions that exert inflationary pressures."


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