Inflation eases to 2.5 percent in March on cheaper oil

Published April 8, 2020, 12:32 AM By Chino Leyco
https://business.mb.com.ph/2020/04/08/inflation-eases-to-2-5-percent-in-march-on-cheaper-oil/

The rate of increase in consumer prices slightly slowed last month after global petroleum prices slid amid weak demand due to global restriction efforts to contain the coronavirus pandemic and price war of major oil producers.

The Philippine Statistics Authority (PSA) reported on Tuesday that headline inflation eased to 2.5 percent in March from 2.6 percent in the previous month, but it is significantly lower compared with 3.3 percent in the same month last year.

The actual March inflation figure is also within the Bangko Sentral ng Pilipinas’ forecast of 2.0 percent to 2.8 percent.

Last month, world oil prices tumbled after governments implemented their “stay at home” orders to stop the spread of thecoronavirus disease (COVID-19) that affected at least 184 countries including the Philippines.

Likewise, Saudi Arabia launched a price war with Russia that triggered a major fall in the price of oil.

Data from the PSA showed that transport costs in March declined by 1.8 percent.

Slower inflation was also recorded on alcoholic beverages and tobacco at 18 percent; and housing, water, electricity, gas, and other fuels at 1.1 percent.

In Metro Manila, inflation decelerated further to 1.7 percent from 2.0 percent in February and 3.2 percent in year ago.

Commodity groups that primarily pushed down the inflation in Metro Manila were housing, water, electricity, gas, and other fuels; and transport whose indices declined at annual rates of 0.9 percent and 3.0 percent, respectively.

Slower price increases were also seen in health at 2.1 percent, recreation and culture at 0.8 percent and restaurant and miscellaneous goods and services at 2.0 percent.

Inflation in areas outside Metro Manila, on the other hand, wasrecorded at 2.7 percent, also lower than the 2.8 percent in the previous month and 3.4 percent in March last year.

The primarily contributor to weaker inflation was transport which dropped at an annual rate of 1.3 percent during the month.

In addition, slowdowns in the annual increases were posted in the indices of alcoholic beverages and tobacco at 18.7 percent; housing, water, electricity, gas, and other fuels, 1.9 percent; and health,
2.9 percent.

In the first three-months of the year, the country’s inflation stood at 2.66 percent, well within the Duterte administration’s target of 2.0 percent to 4.0 percent.