Consumer prices likely picked up further in Mar 18 – DOF

  • Consumer prices likely surged at a faster pace in Mar 18, with the uptick in prices of “sin” products seen stoking inflationary pressure, the Department of Finance said on 4 Apr.
  • In an economic bulletin sent to reporters, the DOF forecasts Mar 18 inflation to hit 4.1% using 2012 as base year, a fresh peak for monthly inflation.
  • Under the old 2006-based consumer price index, inflation in Mar 18 likely clocked 5.0%, the DOF said.
  • If realized, the Finance department’s estimate would breach the Bangko Sentral ng Pilipinas’ 2-4% target range. The central bank last week said it expects Mar 18 inflation to settle at 3.8-4.6% under the rebased index.
  • Feb 18, inflation, as calculated on 2012 base-year, accelerated to a three-year high of 3.9%, which the BSP partly attributed to “full pass-through cost” of a tax reform law that slapped higher excise levies on fuel and cigarettes, among others.
  • Overall price spikes averaged 3.7% for the first two months of 2018 under the 2012 base year, hovering on the top end of the BSP’s annual inflation target.
  • As expected, the central bank on 22 Mar 18, left key rates unchanged, dashing the prospect of an interest rate hike to anchor inflation expectations and keep local yields competitive.
  • Using the revised price index, the central bank projects inflation to average 3.9% in 2018, before easing to 3% in 2019.

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