Philippines Inflation March 2021


Philippines: Inflation decreases in March

April 6, 2021

Consumer prices fell a seasonally-adjusted 0.23% in March over the previous month, swinging from February's 0.24% increase. March's result marked the sharpest fall in prices since December 2018. March’s downturn was chiefly driven by falling prices for food and non-alcoholic beverages, as well as housing and utilities.

Inflation inched down to 4.5%in March, following February’s 4.7%. Meanwhile, the trend pointed up slightly, with annual average inflation coming in at 3.1% in March (February: 2.9%). Lastly, core inflation was steady, coming in at February's 3.5% in March.

Julia Goh and Loke Siew Ting economists at UOB, said:

“We maintain our 2021 full-year inflation outlook at 4.0% (BSP forecast: 4.2%; 2020: 2.6%). Volatile crude oil prices, stronger-thanexpected economic recovery after the roll-out of COVID-19 vaccines and the continuation of policy support, developments of new coronavirus variants, as well as weather conditions are wildcards for our inflation outlook.”

Commenting on March’s decline, Euben Paracuelles and Rangga Cipta, analysts at Nomura, reach a similar conclusion:

“We think the decline is unsustainable as it was led by lower vegetable prices, which are volatile. We expect headline inflation to rise again in the next few months, driven by still-high food prices, particularly for meat, and crude oil. We forecast average CPI inflation of 3.9% this year, up from 2.6% in 2020.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.9% in 2021, which is up 0.5 percentage points from last month’s forecast, and to average 3.1% in 2022.


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Philippines Inflation Chart

Philippines Inflation March 2021

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

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