Lockdown inflation: Consumer prices ease further in April

ABS-CBN News

Posted at May 05 2020 09:15 AM | Updated as of May 05 2020 09:56 AM

A woman waits for her turn to enter a store in Quinta district in Manila on April 28, 2020. Jonathan Cellona, ABS-CBN News

MANILA -- Philippine inflation eased further in April, the first full month that Metro Manila and roughly half the population in Luzon were on lockdown due to the COVID-19 pandemic, official data released Tuesday showed.

The consumer price index rose 2.2 percent in April from 2.5 percent in March. Nineteen economists polled by Bloomberg News gave a median forecast of 2.1 percent while the Bangko Sentral ng Pilipinas research department predicted a 1.9 to 2.7 percent range.

Inflation eased for the third straight month and was at a 5-month low in April, according to ABS-CBN Data Analytics.

“We see that we basically have ample supply for our basic essentials….We are also managing our inflation expectation well,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua told ANC.

“The important thing right now is we have to make sure that our supply is not disrupted,” he added.

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Metro Manila and other urban centers are under lockdown or enhanced community quarantine until May 15, following 2 extensions. The rest of the country was placed under general community quarantine with fewer restrictions from May 1.

With millions required to stay at home, transportation in April recorded the slowest inflation since October 2015, the PSA said.

The fruits and vegetables index both spiked by double-digits at 12.1 percent and 10.3 percent, respectively.

Inflation slowed for meat and fish while it was steady for cereals, flour, cereal preparation, bread, pasta and other bakery products.

The extended lockdown could lead to a 0.8-percent contraction in gross domestic product this year, compared to 0.2 percent had the quarantine ended on April 30.

Governor Benjamin Diokno said Monday "benign" inflation would give the central bank scope to ease monetary policy further, increasing the amount of money that is available in the economy.

Since the lockdown started on March 17, Diokno slashed 100 basis points off the benchmark interest rate, bringing it to 2.75 percent, cut 200 basis points off the reserve ratio requirement for banks and authorized the BSP's purchase of P300 billion in government securities.