The inflation rate
in March 2023 further
eased to 7.6 percent from
8.6 percent in February
- This is within the
inflation forecast of the
Bangko Sentral ng Pilipinas (BSP) at 7.4 to 8.2
percent and is lower than
the median estimate of
private analysts of 8.1 percent.
“Inflation pressures have moderated
in March 2023. This is a
welcome development
and we are determined
to sustain this downtrend.
On the fiscal side, we
are resolute in our commitment to intensify the
timely implementation of
direct measures to curb
persistent inflation and
mitigate its impact on the
most vulnerable sectors,”
Finance Secretary Benjamin Diokno said.
The deceleration can be attributed to
the lower contribution of
Food and non-alcoholic
beverages, Transport, and
Housing, water, electricity, gas, and other fuels to
overall inflation.
Core inflation,
which excludes selected
volatile food and energy items, further climbed
to 8.0 percent in March
2023, from 7.8 percent in
the previous month and
2.2 percent in the same
period a year ago, depicting the broadening of price
pressures.
While inflation of
food and electricity, gas,
and other fuels slowed
down in March, these
items remain to have the
highest contribution for the
month contributing 3.29
percentage points (ppt)
and 0.79 ppt, respectively.
The main contributors to food inflation are
vegetables and fish (both
at 0.56 ppt), dairy items
(0.39 ppt), sugar (0.37
ppt), and flour (0.35 ppt).
Meanwhile, top
contributors to the nonfood inflation are utilities
(0.79 ppt), food and beverage serving services
(0.79 ppt), actual rentals
for housing (0.70 ppt), and
passenger transport services (0.63 ppt).
Inflation in Metro Manila eased from 8.7
percent in February to 7.8
percent in March. It decelerated in all regions except
for the Bangsamoro Autonomous Region of Muslim Mindanao (BARMM).
Inflation for the
bottom 30 percent of
households improved. It
declined to 8.8 percent in
March 2023, from 9.7 percent in February 2023.
The main sources of deceleration were
lower inflation rates of
food and non-alcoholic
beverages (9.5 percent),
housing, water, electricity,
gas, and other fuels (9.5
percent), and transport
(6.1 percent), contributing
to 42.4 percent, 40.4 percent, and 17.1 percent to
downtrend in inflation, respectively.
The government
is adopting a whole-of-government approach to tackle the persistently high
inflation. On the monetary side, the BSP has increased the policy rate by
425 basis points since it
started its policy tightening
cycle.
On the fiscal side,
the government will continue the timely implementation of direct measures to
curb persistent inflation
and mitigate its impact.
Secretary Diokno
held a press conference
on April 4, 2023 to discuss
updates on the recently
approved Inter-agency
Committee on Inflation
and Market Outlook (IACIMO).
The IAC-IMO
serves as an advisory
body to the Economic Development Group (EDG)
on measures that would
keep inflation within the
government’s inflation targets.
The Committee
is looking to streamline
data-gathering tools for
the conduct of timely analysis in mitigating inflation
and is working closely
with various government
agencies, to utilize novel
advances in science and
technology. Some of these
include remote sensing,
space technology, and
data science applications.
The Committee will also be in charge
of closely monitoring the
main drivers of inflation,
assessing the supply
and demand of essential food commodities,
monitoring external and
internal shocks, facilitating data-sharing among
concerned agencies, and
providing timely recommendations to the President to curb price spikes.
The IAC-IMO will
hold technical level meetings throughout April to
assess the drivers of food
and non-food inflation and
recommend policies to
mitigate the impact of inflationary pressures.
The principals-level IAC-IMO is
scheduled to meet by endApril, while the first EDG
meeting will be conducted
on April 26, 2023. DOF.GOV.
