Headline inflation rose to 1.1 percent in March from 0.9 percent in the previous month, and was within the BSP’s forecast of 0.6-1.4 percent for the month. The resulting year-to-date average inflation rate of 1.1 percent was below the Government’s inflation target range of 3.0 percent ± 1.0 percent for 2016. Core inflation, which excludes certain volatile food and energy items to better capture underlying price pressures, was steady at 1.5 percent. Month-on-month seasonally-adjusted headline inflation also picked up in March to 0.1 percent from -0.1 percent in February.
The higher March headline inflation rate was driven mainly by the increase in food inflation. Food inflation rose as prices of selected food items increased, particularly corn, meat, fish as well as oils and fats. Meanwhile, year-on-year non-food inflation was steady in March as the continued decline in electricity, gas, and other fuels inflation were counterbalanced by higher price increases for transport services as well as for restaurants and miscellaneous goods and services.
Officer-In-Charge Vicente S. Aquino noted that the higher inflation reading in March is consistent with the BSP’s assessment that average inflation will settle within the 3.0 percent ± 1.0 percent target range over the policy horizon. Looking ahead, the BSP will remain watchful of domestic and external developments to ensure that the monetary policy stance remains in line with the BSP’s price and financial stability objectives.