The inflation rate for March will still settle within the 2% to 4% target range of the government.

The Bangko Sentral ng Pilipinas (BSP) said earlier that it sees the Philippine inflation rate settling at 3.9% in March. The official March inflation rate will be announced on Friday (April 5, 2024).

The inflation rate for February was 3.4% or higher than the 2.8% of January. In March last year, the inflation rate was 7.6% or lower than the 8.6% of February 2023.

“Continued price increases of rice and meat along with higher domestic oil prices and electricity rates are the primary sources of upward price pressures for the month,” the BSP said in a statement on Monday.

Offsetting the upward inflationary factors are prices of a number of farm products going down and the peso appreciation.

From the private sector, Security Bank Corp. chief economist Robert Dan Roces sees the March inflation rate at 4.0%, attributing this to “base effects, some supply shortages from rice, seasonal uptick of fish and certain food items, and potential El Niño impacts.”

“Overall, the March inflation rate is likely to be within the BSP’s target range, but there are upside risks to consider beyond the first quarter of 2024,” he added.

For his part, ING Manila Bank senior economist Nicholas Antonio Mapa said inflation last month could have risen to 3.8%.

“Higher inflation remains supply side induced but given the elevated nature, could give BSP all the reasons to retain policy rates at their elevated levels of 6.5 percent,” he added.

The BSP is set to meet on Monday (April 8) to decide on policy rates. BSP Governor Eli Remolona has been saying that policy rates may not be reduced soon.

“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” said the BSP.

The World Bank also sees Philippine inflation to settle within the government’s 2% to 4% target range.

In its Macro Poverty Outlook released on Monday, the World Bank projected inflation to hit 3.6 percent this year.

The inflation rate last year was 6% or higher than the 5.8% of 2022.

“Upside risks to inflation include the possibility of supply disruptions due to ongoing geopolitical tensions, further trade restrictions, weakness in agriculture output due to El Niño and extreme weather events, and wage pressures from tightness in labor market conditions,” the World Bank said.