Philippines Inflation March 2022


Philippines: Inflation hits highest level since September 2021 in March

April 5, 2022

Consumer prices recorded 0.99% growth over the previous month in March, coming in above February's 0.27% increase. March's result marked the strongest reading since January 2021.

Inflation rose to 4.0% in March from February’s 3.0%. March's reading represented the highest inflation rate since September 2021. Meanwhile, the trend was unchanged, with annual average inflation coming in at February's 3.8% in March.

Core inflation figures are not due to be published until May due to the recent rebasing of the consumer price index.

Analysts at Nomura see limited scope for a wage-price spiral:

“Higher energy prices will still likely account for most of the pick-up in headline inflation in our forecast, as core inflation should remain muted. BSP [the Central Bank of the Philippines] will be watching for signs of second-round effects emerging, but in the context of a still-nascent recovery and the growth outlook becoming more uncertain, we think these effects are likely to be limited in the coming months.”

Despite little sign of strong demand-pull inflation, analysts at EIU note the effect on inflation of higher oil prices:

“A breakdown of the CPI illustrates that the strengthening upward price pressures are mainly due to rising international oil prices affiliated with the Russia-Ukraine war. As the Philippines' oil companies implemented four upward price adjustments for gasoline and diesel in March, the CPI's utility category (including fuels) grew by 6.2% year on year, from 4.8% in February. Transport costs rose in tandem, to record growth of 10.3% in March. The higher fuel costs for transporting food and fishing contributed to food price inflation more than doubling its growth rate, to 2.6%.”

FocusEconomics Consensus Forecast panelists expect inflation to average 3.8% in 2022, which is up 0.4 percentage points from last month’s forecast, and 3.3% in 2023.


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Philippines Inflation Chart

Philippines Inflation March 2022 0

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

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