The Philippine National Statistical Office recently reported that the Consumer Price Index (CPI) rose 7.6% in March compared to the same month last year. This was the slowest expansion in six months and below the expected 8% increase.
The Philippine CPI slowed for the second straight month due to the decline in food prices and transportation costs. The information could lead the Philippine central bank to consider ending the rate hike cycle, as it has been increasing its key interest rate to curb inflation.
However, the core CPI, which excludes food and energy prices, rose 8% in March from 7.8% in February. The March index gained at its fastest pace since 1999, indicating that underlying inflationary pressures are still present.
Philippine Economic Planning Minister Arsenio Baliscan stated that even if inflation starts to slow down, the government sees that the figure is still at a very high level. This is a factor that needs to be monitored, and measures must be prepared to deal with inflation.
The Philippine central bank previously raised its policy rate by 50 basis points in March to address the increasing inflation. With the recent slowdown in CPI, analysts predict that the central bank may hold off from another rate hike during its upcoming meeting.