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Inflation rises to 4.2% in March |
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By Des Ferriols
The Philippine Star 04/07/2004 The nationwide inflation rate rose to 4.2 percent in March, exceeding expectations and prompting monetary authorities to take a cautious stance, officials and analysts said. The March figure was a slight uptick from February’s four percent inflation rate, bringing the average rate for the first three months of the year to four percent, the National Statistics Office (NSO) reported yesterday. Despite the rise, Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura told reporters that "we still see inflation to be within the (target) range but most likely at the higher end." "Monetary officials will be cautious due to expected increases in oil prices, a recent transport fare adjustment and possible wage hikes," he said. The rise in the inflation rate was attributed mainly to price increases in the food, beverage and tobacco sector, which has the greatest weight in official inflation estimates. The sector saw its price index rise 4.2 percent in March while another crucial sector, homes and repairs, rose by 3.2 percent, the government statistics office said. "Our outlook might change and that will determine the course of action we will take in the coming months," Buenaventura said. The 4.2 percent national inflation in March was computed under a new system based on prices in 2000 instead of 1994. The NSO started using the new system in January to reflect changes in Filipino consumption patterns. The BSP also uses an indicator called core inflation which excludes prices of volatile food and energy items such as rice, corn, fruites and vegetables, LPG, kerosene and gasoline. The core inflation, according to the BSP, also went up to 4.6 percent based on 2000 prices. "We are not totally surprised that inflation in March was faster than expected given the many factors driving prices higher, such as the weak peso and oil price increases," said Elena Ponceca of Unicapital Securities. "In this kind of environment, it is possible that the BSP will resort to policy tightening either through an increase in reserve requirement or interest rate," she added. The inflation rate in Metro Manila stood stood at 3.9 percent, a slowdown from the 4.1 percent in February. However, the inflation rate in the areas outside Metro Manila rose to 4.3 percent in March from 3.9 percent in February. Previous | Next > | Latest News |
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