BSP sees inflation to slow down at 4.6% in March

The Bangko Sentral ng Pilipinas (BSP) is expecting the inflation rate to slightly slow down in March due to lower electricity rates and the effect of price caps on meat products.

“Point inflation projection for March 2021 is 4.6%,” BSP Governor Benjamin Diokno told reporters in a Viber group message.

The central bank projection is slightly lower than the 4.7% inflation rate

As for the forecast range, the BSP projects that inflation will settle within 4.2% to 5.0%, still breaching the government’s target range of 2% to 4%.

Diokno earlier admitted that inflation for the entire 2021 will accelerate further than the government’s target band due to supply-side issues. 

“The downward adjustment in Meralco electricity rates as well as lower prices of key food items due to supply conditions and the continued implementation of price caps on meat products are the main sources of downside price pressures during the month,” the BSP chief said.

Meralco slashed power rates by P0.3598 per kilowatt-hour (kWh) in March, bringing the overall rate to P8.3195/kWh in March from P8.6793 in February. 

The P0.3598/kWh rate rollback is equivalent to a decrease of around P72 in the total bill of residential customers consuming 200 kWh.

In February, President Rodrigo Duterte issued an executive order imposing a price cap on pork products as requested by the Department of Agriculture due to soaring pork prices caused by the African swine fever problem and the COVID-19 pandemic. 

Under the executive order, the price cap for kasim and pigue was set at P270 per kilo, P300 for liempo, and P160 for dressed chicken per kilo. The price cap will last for 60 days.

“These factors could be partly offset by higher oil prices and the peso depreciation, however,” Diokno said.

“Moving forward, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” he added. —KBK, GMA News