June 27, 2022

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Inflation likely accelerated in March

2 min read
A worker changes the price of liquefied petroleum gas (LPG) at a gas station in Tondo, Manila, April 1. — PHILIPPINE STAR/ RUSSEL PALMA

By Luz Wendy T. Noble, Reporter

HEADLINE INFLATION likely accelerated in March as the spike in global crude oil prices probably caused a faster increase in food and transport costs, according to analysts.

A BusinessWorld poll of 18 analysts yielded a median estimate of 4% for last month’s inflation, nearer the upper end of the Philippine central bank’s 3.3% to 4.1% projection.

If realized, this would be much quicker than the 3% in February and matches the high end of the 2-4% target range by the Bangko Sentral ng Pilipinas (BSP). However, it will still be slower than the 4.5% seen a year earlier. 

Analysts’ March 2022 inflation rate estimates

The Philippine Statistics Authority will release the March inflation data on April 5.

Analysts said the surge in pump prices was a major inflation driver in March.

Crude oil prices have become more volatile since Russia’s invasion of Ukraine in late February. There were fears over disruption in oil supply as Russia is a major oil exporter.

Since the start of 2022, prices of gasoline, diesel, and kerosene increased by P18.30, P27.85, and P25.75 per liter, respectively.

“As a net oil importer, Philippines is highly exposed to the surge in commodity prices directly through higher fuel prices and subsequently higher electricity prices,” said Makoto Tsuchiya, an economist at Oxford Economics.

Concerns over global supply of grains and wheat also drove their prices higher as Ukraine and Russia are major exporters.

“Upward pressure will likely emanate from private vehicle transport costs (pump prices) on top of utilities,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said. 

Mr. Tsuchiya also pointed out there are several petitions to raise minimum daily wages and transport fares, which are being reviewed by the government.

“Second-round effects [are] likely amid growing calls for transport fare hikes…

Neil

2022-04-03 12:33:09

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