Inflation accelerates to 4 pct in March 2022

Consumer price index (CPI) or inflation in the Philippines grew at a faster pace of 4 percent in March to hit the quickest pace in six months and equal to the print recorded in October 2021, the Philippine Statistics Authority (PSA) reported on Tuesday.

Inflation clocked in at 4.0% in the past month, which compares with 3% in February and the downward revised 4.1% in March 2021. This is the fastest since September 2021’s 4.2%.

Oil price upticks in the international market due largely to Russia’s invasion of Ukraine was seen as the main reason for the faster CPI.

This brought the average inflation in the first quarter this year to 3.4 percent, within the government’s 2-4 percent target range until 2024.

Higher monthly upticks were also noted in the seasonally adjusted CPI for the following commodity groups:

1. Food and non-alcoholic beverages, 1.3 percent from -0.3 percent;
2. Alcoholic beverages and tobacco, 0.8 percent from 0.1 percent;
3. Non-food, 1.0 percent from 0.5 percent;
4. Clothing and footwear, 0.2 percent from 0.1 percent;
5. Housing, water, electricity, gas, and other fuels, 1.4 percent from 0.3 percent;
6. Furnishings, household equipment and routine maintenance of the house, 0.2 percent from 0.1 percent; and
7. Health, 0.2 percent from 0.1 percent;

On the contrary, the month-on-month increment decelerated in the seasonally adjusted CPI for restaurants and accommodation services at 0.2 percent in March 2022, from its previous month’s growth rate of 0.3 percent.

Furthermore, the monthly growth of the deseasonalized CPI for personal care and miscellaneous goods and services remained at 0.2 percent, while zero growth was observed for education services.

The seasonal factor such as the degree of demand of selected commodities during the season pushed up the indices for the following:

1. All items;
2. Food and non-alcoholic beverages;
3. Alcoholic beverages and tobacco
4. Non-food;
5. Clothing and footwear;
6. Housing, water, electricity, gas, and other fuels;
7. Furnishings, household equipment and routine maintenance of the house;
8. Restaurants and accommodation services; and
9. Personal care and miscellaneous goods and services.

Although the seasonal factor pushed down the index of education services, it did not affect the index for health.

NATIONAL CAPITAL REGION

Similar with the trend at the national level, the monthly growth rate of the seasonally adjusted CPI for all items in NCR accelerated to 1.0 percent in March 2022, from 0.1 percent in February 2022.

The monthly growth rate of the deseasonalized CPI also picked up for the following commodity groups:

1. Food and non-alcoholic beverages, 1.9 percent from -0.1 percent;
2. Alcoholic beverages and tobacco, 0.3 percent from 0.1 percent;
3. Non-food, 0.7 percent from 0.2 percent;
4. Housing, water, electricity, gas, and other fuels, 0.8 percent from -0.6 percent;
5. Furnishings, household equipment and routine maintenance of the house, 0.4 percent from zero growth;
6. Health, 0.2 percent from -0.3 percent; and
7. Personal care and miscellaneous goods and services, 0.5 percent from 0.1 percent.

On the other hand, the monthly upticks of the seasonally adjusted CPI for restaurants and accommodation services dropped to -0.1 percent from its corresponding previous month’s growth rate of 0.5 percent.

Meanwhile, the monthly growth of the seasonally adjusted CPI for clothing and footwear, information and communication, and education services remained at 0.1 percent.

The seasonal factor such as the degree of demand for selected goods and services during the season pushed up the indices for the following:

1. All items;
2. Alcoholic beverages and tobacco;
3. Non-food;
4. Clothing and footwear;
5. Housing, water, electricity, gas, and other fuels;
6. Furnishings, household equipment and routine maintenance of the house; and
7. Personal care and miscellaneous goods and services.

However, the seasonal factor pushed down the indices of food and non-alcoholic beverages, education services, and restaurants and accommodation services.

Moreover, the seasonal factor did not affect the indices of health and information and communication.

AREAS OUTSIDE NCR

The monthly increment of the seasonally adjusted CPI for all items in AONCR inched up to 0.9 percent in March 2022, from 0.4 percent in February 2022.

Likewise, faster month-on-month growth rates were noted in the deseasonalized CPI for the following commodity groups:

1. Food and non-alcoholic beverages, 1.0 from -0.3 percent
2. Alcoholic beverages and tobacco, 0.8 percent from 0.1 percent;
3. Non-food, 1.1 percent from 0.7 percent;
4. Clothing and footwear, 0.2 percent from 0.1 percent;
5. Housing, water, electricity, gas, and other fuels, 1.5 percent from 0.6 percent;
6. Furnishings, household equipment and routine maintenance of the house, 0.3 percent from 0.1 percent; and
7. Restaurants and accommodation services, 0.3 percent from 0.2 percent;

The monthly growth rate of the deseasonalized CPI for education services remained at 0.1 percent while that of health, and personal care and miscellaneous goods and services remained at 0.2 percent. The deseasonalized CPI for information and communication remained at zero growth.

The seasonal factor like the degree of demand for selected goods and services during the season pushed up the indices for the following:

1. All items;
2. Food and non-alcoholic beverages;
3. Alcoholic beverages and tobacco;
4. Non-food;
5. Clothing and footwear;
6. Housing, water, electricity, gas, and other fuels;
7. Furnishing, household equipment and routine household maintenance;
8. Restaurant and accommodation services; and
9. Personal care, social protection and miscellaneous goods and services

The seasonal factor pushed down the index for education services but did not affect the index of health, and information and communication.

WITHIN TARGET

In a Viber message to journalists on Tuesday, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said “inflation expectations have likewise risen, but continue to be anchored to the 2-4 percent target band.”

Increases in oil prices and their impact on commodity prices in both the international and domestic markets made Philippine monetary authorities hike the government’s average inflation forecast for this year to 4.3 and 3.6 percent for 2023. These were previously at 3.7 percent for 2022 and 3.3 percent for 2023.

Diokno said “the economic consequences of Russia’s invasion of Ukraine have become a significant headwind in global economic recovery.”

He said this development may impact the domestic economy through “slower world GDP (gross domestic product) growth, higher crude oil prices, higher world non-oil prices, and potential second-round effects on inflation through transport fares, wages, and food prices.”

“Under these circumstances, the BSP will closely monitor the emerging risks to the outlook for inflation and growth, and remain vigilant against possible second-round effects from supply-side pressures or any shifts in the public’s inflation expectations,” he said.

Diokno said the central bank “continues to have a wide arsenal of policy instruments to respond to possible adverse impact of external shocks.”

“The BSP likewise supports the timely implementation of direct non-monetary measures by the government to mitigate the impact of the Russia-Ukraine conflict on global oil and non-oil commodity prices,” he said, adding “previous episodes of supply-side shocks in the country have shown that these are best addressed through timely non-monetary policy interventions that could ease directly domestic supply constraints and prevent second-round effects on prices.” (With reports from PSA and PNA)