Philippines Inflation March 2018


Philippines: Inflation breaches the Central Bank's target range in March

April 5, 2018

In March, consumer prices increased 0.5% compared to the previous month, below February’s 0.7% month-on-month rise. The rise was again largely driven by higher prices for alcoholic beverages and tobacco, and for clothing and footwear. Prices are still being pushed up by the entry into force in 2018 of the Tax Reform for Acceleration and Inclusion (TRAIN), which increased excise taxes on a number of products.

Inflation came in at an over six-year high of 4.3% in March, above February’s 3.8%. As a result, inflation moved above the upper bound of the Central Bank’s target range for the 2017–2020 period, set at 3.0% plus or minus one percentage point. Meanwhile, annual average inflation inched up to 3.1% from February’s 3.0%.

Core consumer prices, which exclude volatile items such as foodstuffs and oil, rose 0.7% over the previous month in March, marginally down from February’s 0.8% increase. Finally, core inflation came in at 4.7% in March, accelerating further from February’s 4.4%, marking the highest reading since April 2009.

Phlippines Inflation Forecast

FocusEconomics Consensus Forecast panelists expect inflation to average 3.5% in 2018, which is unchanged from last month’s projection. For 2019, panelists see inflation of 3.4%.

Author: Massimo Bassetti, Senior Economist

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Philippines Inflation Chart

Philippines Inflation March 2018

Note: Annual and monthly variation of consumer price index in %.
Source: Central Bank of the Philippines (BSP) and FocusEconomics calculations.

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