The Bangko Sentral ng Pilipinas (BSP) expects inflation to rise within a range of 3.1 percent to 3.9 percent as the country braces for the first round of macroeconomic impacts from the Middle East conflict.

In a statement, the central bank said headline inflation could increase by as much as 1.5 percentage points from February’s 2.4 percent, driven mainly by “the significant increase in domestic petroleum prices, higher rice prices, increased electricity charges in Meralco-serviced areas, and depreciation of the peso.”

Upside pressures continue

“The anticipated lower prices of vegetables, fish, and meat may help temper inflation, but upside pressures continue to warrant close monitoring,” the statement added. The BSP’s projection for March remains within the annual target range of 2 percent to 4 percent.