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Philippines Inflation March 2020

Philippines: Inflation softens in March

Consumer prices fell 0.08% over the prior month in March, following the 0.16% decline in February. March’s drop was due to a sharp decrease in transport prices and smaller dips in the prices of food and non-alcoholic beverages and housing and utilities. That said, a steep rise in the prices of alcoholic beverages and tobacco, due to the recent excise tax hike, offset the dip in the index.

Inflation edged down to 2.5% in March from 2.6% in February, but remained within the Central Bank’s target band of 2.0%–4.0%. Core inflation, which excludes volatile food and energy prices, eased to 3.0% from 3.2%. Meanwhile, annual average inflation fell to 2.2% in March from 2.3% in the month prior.

This year, inflation should fluctuate around current levels, supported by the pass-through from the Bank’s monetary policy easing. That said, the Covid-19 economic shock, virus-related lockdown measures and depressed oil prices so far in H1 could exert further downward pressure on prices.

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