Philippine inflation quickens to 4.1% in March, fastest in nearly 2 years

By Katherine K. Chan, Reporter

Faster price increases in fuel, electricity and food, including rice, pushed Philippine inflation past the Bangko Sentral ng Pilipinas’ (BSP) target for the first time in nearly two years, the Philippine Statistics Authority (PSA) reported.

The consumer price index (CPI) quickened to 4.1% in March from 2.4% in February and 1.8% in the same month last year.

This was the fastest pace in nearly two years or since the 4.4% in July 2024, and likewise marked the first time since then that the headline print breached the BSP’s 2%-4% target.

March inflation also came in above the 3.8% median forecast in a BusinessWorld poll of 18 analysts and the central bank’s 3.1%-3.9% estimate for the month.

In the three months to March, inflation averaged 2.8%.

National Statistician Claire Dennis S. Mapa attributed the pickup to faster price increases in the transport index, particularly in gasoline and diesel, which accounted for 54.8% of the overall inflation rate in March.

During the month, transport inflation stood at 9.9%, a reversal from the -0.3% clip recorded in February.

This came as weekly pump price hikes pushed gasoline and diesel inflation to its fastest in over three years at 27.3% and 59.5%, respectively. It likewise marked a reversal from -5.7% and -1.3% the previous month.

Asked if the faster transport and food inflation was driven by the ongoing oil crisis from the Middle East war, Mr. Mapa said: “Yes, definitely.”

He noted that oil price surges have already spilled over to several commodity groups last month, including food, housing, water, electricity, gas and other fuels.

“Of course, we’ve already seen this in 2022 to 2023, where there were direct and immediate effects on other commodity groups when gasoline and diesel prices rose,” Mr. Mapa told a news briefing on Tuesday. “First, we saw it in power, housing, water, electricity, gas, and other fuels. So there are spillover effects.”

“And based on previous years, when we also had spikes in fuel prices in the world market, the impact was quick on other commodity items. That’s why in the 13 commodity groups we track, almost 10 of them rose,” he added.

Meanwhile, core inflation, which excludes volatile food and fuel prices, picked up to 3.2% in March from 2.9% in February and 2.2% a year earlier. This was the fastest core print in two years or since the 3.4% in March 2024.