Food prices rose while fuel and other essential commodities and services fell in March when the enhanced community quarantine (ECQ) on Luzon started resulting to inflation decelerating for the second month to 2.5 percent from 2.6 percent in February and 3.3 percent in March 2019, government data showed.
The price data was well within the governmen’s target of 2 to 4 percent this year.
The Philippine Statistics Authority (PSA) figures showed oil prices plummeted due to reduced consumption as the public focused on the purchase of food and medical supplies.
Public transport and shopping malls were shut during the ECQ that was cited by the government as a key factor in the favorable inflation number.
The consumer price index rose from 2.6 percent in February and the median forecast of economists in a survey was for a 2.3 percent rise while the research arm of the Bangko Sentral ng Pilipinas gave a forecast of between 2 and 2.8-percent increase.
The latest inflation level also reflected continuing market demand and producers are still earning, according to Security Bank economist Dan Roces.
“We’re seeing that demand is still alive and well. There’s still demand for basic goods. That’s also good for producers, it also means they’re still earning,” Roces said.
“In a way, it’s also reflective of some disruption in the supply chain. If it’s extended, we’ll probably see the same behavior in terms of consumption,” he noted.
Meantime, Socioeconomic Planning Secretary Ernesto Pernia described the March price rise as “benign.”
PSA figures indicated easing of rise in transportation costs to 1.8 percent during the month drove inflation down while petroleum and fuels for personal transportation fell to -12.3 percent from 1.2 percent in February.
Domestic airfare, on the other hand, dropped to 1.8 percent from 4.9 percent in February, while ferry and ship fares declined to 12.5 percent from 39.3 percent.
Kerosene (-13 percent), electricity (-7.2 percent) and liquefied petroleum gas (3.2 percent) registered slowdowns as well, while slower annual increments in alcoholic beverages and tobacco (18 percent) and housing, water, electricity, gas and other fuels (1.1 percent) also pushed down inflation.
Food inflation went up by 2.6 percent as fish, fruits and vegetables all registered higher annual markups, while meat prices fell to 2.6 percent from 2.9 percent in February.