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.

External Link : https://www.philstar.com/business/2018/04/04/1802770/consumer-prices-likely-picked-further-march-dof