MANILA - Inflation slightly eased in March due to slower price movement of food and non-alcoholic beverages following 5 straight months of acceleration, government data released Tuesday showed.
The consumer price index rose 4.5 percent in March, slightly slower from the 4.7 percent in February, the Philippine Statistics Authority said in a virtual briefing.
March inflation is within the 4.2 percent to 5 percent forecast of the Bangko Sentral ng Pilipinas and above the government's 2 to 4 percent range target.
"The overall latest outturn is consistent with expectations that inflation could settle above the high end of the target in 2021, reflecting the impact of supply side constraints on domestic prices of key food commodities, such as meat, as well as the continuing rise in world oil prices," the BSP said in a statement.
The slightly lower inflation for March was a "pleasant surprise." However, the supply-side risks such as the shortage in pork need to be addressed to avoid price spikes in the near term, ING Bank Manila's senior economist Nicholas Mapa told ANC.
"Unless that’s addressed, we’re likely to see bouts of inflation spiking once again," Mapa said.
"The wildcard really is the food component. Wherever food inflation goes, I think that’s where the headline numbers should follow," he added.
BSP Governor Benjamin Diokno earlier said inflation is likely to breach the upper band of the government's target range for 2021.
For 2022, inflation forecast was raised to 2.8 percent from 2.7 percent, the central bank said.
Despite the uptick, Diokno said inflation is still "transitory" and manageable.
Metro Manila, Cavite, Laguna, Rizal and Bulacan remain under enhanced community quarantine due to the rising number of confirmed COVID-19 cases, putting a strain on movements and other economic activities.
Mapa said the 4.5 percent inflation in March gave the BSP a "reprieve" in terms of adjusting monetary policies.
The BSP said it still has tools to support the economy. Key interest rate, used by banks to price loans, were kept at its lowest level of 2 percent in February's Monetary Board meeting.