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Lower power rates ‘easing inflation’

The Bangko Sentral ng Pilipinas (BSP) has seen the March 2022 inflation ending within the 3.3 percent to 4.1 percent range, its Governor Benjamin Diokno said Thursday.

“The continued oil price hikes along with high electricity rates in Meralco-serviced areas, higher meat prices, and the peso depreciation are the primary sources of inflationary pressures during the month,” Diokno told reporters.

“These could be offset in part by lower water rates in Maynilad and Manila Water-serviced areas and the decrease in prices of rice, fish and vegetables owing to easing supply constraints,” he added.

Looking ahead, Diokno said the BSP will continue to monitor emerging price developments to help stabilize prices and sustain economic growth in the country.

Michael Ricafort, chief economist of Rizal Commercial Banking Corp., estimated March inflation hit 4.4 percent year-on-year.

Ricafort said inflation could hover at the 4-percent levels in the coming months, largely because of the increase in global oil and other commodity prices.

His inflation forecast may be contrasted with 3.9 percent in 2021 using the new 2018 base year and 4.5 percent in 2021 using the old 2012 base year.

The above factors may, however, be offset by non-monetary measures such as the increased subsidies for the transport and agricultural sectors.

Another offsetting factor, he said, is the sharp downward correction in the Nymex global oil prices to a little over $100 per barrel, down from the immediate high of $130.50 per barrel on 7 March.

Before Russia invaded Ukraine on 24 February this year, oil was selling at $92 per barrel, up by about $30 from the $75 pricing in end-2021.

For the coming months, potential sources of second-round inflation effects include transport fare hikes and the proposed wage increase.


Source: Daily Tribune

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