INFLATION rose for a third straight month in April on account of higher food and transport costs, the Philippine Statistics Authority (PSA) reported on Tuesday, but beat expectations that it would once again breach the target.
Consumer price growth picked up from 3.7 percent in March to 38 percent — within the Bangko Sentral ng Pilipinas' (BSP) 3.5- to 4.3-percent forecast but lower than the 4.1-percent median in a Manila Times poll of analysts.
Year to date, inflation stayed within the central bank's 2.0- to 4.0-percent target at 3.4 percent.
Core inflation, which strips out volatile food and energy prices, also decelerated to 3.2 percent from 3.4 percent, leading to a three-month average of 3.5 percent.
Both headline and core inflation a year earlier were significantly much higher at 6.6 percent and 7.9 percent, respectively.
Main contributors
"The uptrend in the overall inflation in April 2024 was primarily influenced by the higher year-on-year increase in the heavily weighted food and nonalcoholic beverages at 6.0 percent during the month from 5.6 percent in March 2024," the PSA said in a statement.
Food and alcoholic beverages accounted for over half — a 59.7-percent share or 2.3 percentage points — of headline inflation.
The uptick was also fueled by a 2.6-percent rise in transport inflation from 2.1-percent contraction in March.
Food inflation rose to 6.3 percent from 5.7 percent but was lower than the 8.0 percent a year earlier.
The PSA said this was due to a 4.3-percent year-on-year increase in vegetable, tuber, plantain, cooking banana and pulse prices from a 2.5-percent drop in March.
Fish and other seafood price inflation also rose, by 0.4 percent, from March's drop of 0.9 percent.
Rice inflation, however, eased to 23.9 percent 24.4 percent.
Govt to stay vigilant
The government, Socioeconomic Planning Secretary Arsenio Balisacan said in a statement, will remain watchful despite April's within-target result.
"While this increase remains within the government's target range, it underscores the need for vigilance," he said.
"We are taking comprehensive measures to ensure food security amid geopolitical concerns and weather patterns worsened by climate change," Balisacan added.
"The government's major strategies aim to increase productivity, build the resilience of the agriculture sector and improve the efficiency of food systems."
The central bank, meanwhile, said it continues to support the governments' "nonmonetary measures to address supply-side pressures on prices and sustain the disinflation process."
It still expects the rate to breach target moving forward due to the impact of adverse weather on agricultural output and base effect, but end 2024 back within 2.0 to 4.0 percent.
"The risks to the inflation outlook continue to lean toward the upside," the BSP said.
"Possible further price pressures are linked mainly to higher transport charges, elevated food prices, higher electricity rates and global oil prices," it added.
"Potential minimum wage adjustments could also give rise to second-round effects."
It said that April inflation, along with preliminary first-quarter economic growth results due on Thursday, would be considered along with other data when the policymaking Monetary Board meets on Thursday next week.
Analysts have said that key interest rates are likely to remain unchanged for a fifth straight meeting.
The BSP's benchmark rate currently stands at 6.5 percent, the highest since 2007, following 450 basis points of rate hikes beginning May 2022 as inflation surged in the wake of Russia's invasion of Ukraine.
BSP Governor Eli Remolona Jr. has said that rate cuts will only be considered once inflation stays firmly within target.
The first — likely to be 25 basis points — could even be delayed to the first quarter of next year, the central bank chief said last month.