Headline inflation is likely to increase slightly to 1.1 percent this month, the Department of Finance said, in spite of lower power rates and fuel prices during the month.
“Inflation rate for March may inch up to 1.1 percent from the 0.9 percent registered last February,” the department said in its latest Economic Bulletin.
Inflation moderated to 0.9 percent in February from January’s 1.3 percent. March of last year saw the rise in consumer prices hit 2.4 percent.
Official March 2016 data is scheduled to be released next week by the Philippine Statistics Authority.
The Finance department pointed out that Manila Electric Co.’s rate for March is about 17 percent lower that of the same month last year.
It also said that average diesel pump prices, while having bottomed out last January and have shown upward trend since then, are still significantly lower than those of last year.
“Benign inflation will give government elbow room to maintain growth-supportive fiscal and monetary policy and strengthen government capability to combat international market volatility,” the agency said.
At its last monetary policy meeting, the Monetary Board of the Bangko Sentral ng Pilipinas decided to keep overnight borrowing and lending rates at 4 percent and 6 percent, respectively. The special deposit account rate was kept at 2.5 percent, while the reserve requirement ratio for banks still stands at 20 percent.