Year-on-year headline inflation continued to decelerate in March to 2.6 percent from 2.7 percent in February. The year-to-date average of 3.1 percent was within the Government’s inflation target range of 3-5 percent for 2012 and the BSP’s monthly forecast of 2.2-3.1 percent.
The slowdown in inflation was traced mainly to slower price increases for non-food items, as electricity rates declined. Food inflation also held steady as some food commodities showed slower price movement. Notably, slower increases in the prices of vegetables and sugar due to favorable supply conditions, helped pull down inflation.
The latest inflation readings remain consistent with the BSP’s assessment of a manageable inflation environment over the policy horizon. The BSP continues to monitor emerging conditions here and abroad to ensure that monetary policy settings remain appropriately calibrated to achieve the price stability objective while being supportive of economic growth.