Philippine inflation rises in April 2024, below forecast

By Francis Allan Angelo and Sean Rafio

The Philippines’ inflation rate increased for a third straight month in April due to a faster pace of price rises for food and transport, the Philippine Statistics Agency (PSA) said on Tuesday.

PSA reported that the headline inflation — the rate of increase in the prices of goods and services — was at 3.8% in April, bringing the year-to-date rate to 3.3%.

The latest print compares with the 3.7% in March, and the 6.6% in April 2023. It is also the fastest since the 3.9% in December 2023.

But it was within the 3.5 percent to 4.3 percent forecast of the Bangko Sentral ng Pilipinas and also within the government’s target range of 2 to 4 percent.

“Yung average price ng rice ay bumaba nitong Abril. Ang rice inflation ay bumaba slightly [to] 23.9 percent noong Abril, average for all households at the national level versus 24.4 percent [in March],” National Statistician and PSA Undersecretary Dennis Mapa said.

Food inflation — which contributed 57.9% or 2.2 percentage points to overall inflation — stood at 6.3% during the month, mainly due to higher prices of vegetables, tubers, plantains, cooking bananas, and pulses whose index climbed by 4.3%.

Fish and other seafood prices also increased by 0.4%, and ready-made food and other food products by 4.8%.

The April inflation sits comfortably within the central bank’s projected range for the said month, which was set between 3.5% and 4.3%.

So far, the year-to-date inflation rate has averaged 3.4%, aligning with the central bank’s annual target range of 2% to 4% for 2024. This consistency suggests that while prices are rising, the increase remains manageable within the parameters set for economic stability.

Meanwhile, the core inflation rate, which excludes volatile items like food and fuel to provide a clearer measure of long-term inflation trends, saw a slight decrease in April. It eased to 3.2% from 3.4% in March, coming in below another Reuters poll projection of 3.3%.

A separate survey conducted by BusinessWorld, which included 16 economists, also indicated a median inflation expectation of 4.1%, underscoring a more cautious outlook among some financial experts.

Despite these pressures, the inflationary increase is still within the limits expected by the central bank, which may influence future monetary policy decisions to ensure economic growth while maintaining price stability.

In a statement, the Bangko Sentral ng Pilipinas said the April 2024 inflation of 3.8 percent is within its forecast range of 3.5 to 4.3 percent.

“The inflation outturn is consistent with the BSP expectations that inflation could accelerate temporarily above the target range in the next two quarters of the year due to the possible negative impact of adverse weather conditions on domestic agricultural output and positive base effects.”

Nonetheless, the BSP expects average inflation to return to the target range for full year 2024 and 2025.

“The risks to the inflation outlook continue to lean toward the upside. Possible further price pressures are linked mainly to higher transport charges, elevated food prices, higher electricity rates, and global oil prices. Potential minimum wage adjustments could also give rise to second-round effects.”

Looking ahead, the Monetary Board will consider the latest inflation and Q1 2024 GDP outturns, among other information, in its upcoming monetary policy meeting on 16 May 2024. The BSP also continues to support the National Government’s non-monetary measures to address supply-side pressures on prices and sustain the disinflation process.