(CNN Philippines) — The economy’s headline inflation rate slightly eased to 2.4% last March from 2.5% in February, according to figures from the Philippine Statistics Authority. The figure is also lower than the 3.9% rate posted on March 2014.
The National Economic and Development Authority credits the decline to lower food prices, primarily those of rice and meat. “The easing annual growth rate of rice prices was supported by favorable total rice stocks inventory,” explained NEDA chief Arsenio Balisacan, who is also the country’s economic planning secretary.
“Food inflation could have been lower if not for the relatively higher prices of vegetables and fish, which is due in part to the likely shift in consumers’ preferences given the onset of the Lenten season,” he added.
However, inflation among non-food items rose to 0.9% last month, from 0.6% in February.
In a statement, the Bangko Sentral ng Pilipinas (BSP) attributed this “mainly to the upward adjustment of electricity rates as well as higher gasoline and diesel prices in most regions.”
The average rate for the first quarter of 2015 stands at 2.4%. This figure sits within the government’s target range of 2% to 4% for 2015, as set by the NEDA Board Development Budget Coordination Committee.
Despite the slowdown, the economy’s core inflation rate rose to 2.7% in March, from 2.5% in February. However, the figure is still lower than 2.8% recorded on March 2014.
Unlike headline inflation, core inflation is a metric that excludes certain food and energy prices because of their volatility. The BSP said that this metric better captures underlying price pressures.
The figure’s average rate for the first quarter of 2015 stands at 2.5%.
“Inflation remained low and stable in the first three months of the year in line with expectations over the policy horizon, which is likely to support consumption growth,” Balisacan said.
According to NEDA, the current stability in domestic prices can be attributed to strong remittances, rising business process outsourcing industry earnings and foreign direct investment, a manageable level of external debt, and the BSP’s ample international reserves.
“Our overall inflation outlook remains well- anchored as policies continue to be supportive of a stable inflation rate. While the current episode of mild El Niño and power woes still pose risks to inflation, the continuing efforts to ensure that appropriate policy actions are implemented are expected to temper inflationary pressures over the near to medium term,” contends Balisacan.
