The Philippines’ headline inflation increased to 3.7% in March, higher than the 3.4% in February but lower than the 7.6% in March last year, according to the Philippine Statistics Authority (PSA).

One of the main drivers of the higher inflation rate in March this year was the high inflation of rice prices, which boosted food inflation to 5.7%.

Rice inflation for March was 24.4% or higher than the 23.7% in February.

NEDA Secretary Arsenio Balisacan, for his part, said the government is closely monitoring weather conditions and their effects on the supply of key commodities, such as food and energy, to protect Filipino households from sudden price increases.

In a separate statement, the Bangko Sentral ng Pilipinas (BSP) said the March 2024 inflation is within the BSP’s forecast range of 3.4 to 4.2 percent.

“The uptrend in the overall inflation in March 2024 was primarily influenced by the higher year-on-year increase in the heavily-weighted food and non-alcoholic beverages at 5.6 percent during the month from 4.6 percent in February 2024,” the PSA said in a statement.

“In addition, the faster annual increases in the indices of transport at 2.1 percent during the month from 1.2 percent in February 2024, and restaurants and accommodation services at 5.6 percent in March 2024 from 5.3 percent in the previous month contributed to the uptrend,” it added.

Moreover, higher inflation rates were also noted in the indices of health at 3.2 percent and recreation, sport and culture at 3.9 percent during the month from their respective inflation rates of 3.0 percent and 3.8 percent in the previous month.

In contrast, the following commodity groups registered lower inflation rates during the month:

– Alcoholic beverages and tobacco, 6.7% from 8.6%

– Housing, water, electricity, gas and other fuels, 0.5% from 0.9%

-Furnishings, household equipment and routine household maintenance, 3.2% from 3.3%

– Personal care, and miscellaneous goods and services, 3.6% from 3.8%

At the NEDA, Balisacan said the government is closely monitoring weather conditions and their effects on the supply of key commodities.

“To ensure sufficient water supply and support our farmers during the dry season, the Department of Environment and Natural Resources has been tasked with monitoring water supply in the country,” Balisacan said. “Simultaneously, the Department of Agriculture is proactively extending assistance to farmers adversely affected by the drought.”

The BSP said risks to the inflation outlook remained tilted toward the upside.

It noted that upside risks to the inflation outlook could emanate from higher transport charges, higher prices of food commodities facing supply constraints, increased electricity rates, higher global oil prices, and implementation of a legislated increase in the minimum wage.

The BSP Monetary Board will meet on Monday (April 8) to determine if there is a need to maintain or raise key policy rates. It previously said it would likely maintain key policy rates.