INFLATION is likely to further decelerate to below 2 percent this month as better weather conditions helped increase agricultural production, an economist said.
In a Viber message to the Philippine News Agency on Friday, Rizal Commercial Banking Corporation chief economist Michael Ricafort said inflation is projected to further ease to 1.9 percent in March from 2.1 percent in February.
Ricafort’s forecast falls below the lower end of the Bangko Sentral ng Pilipinas’ (BSP) 2 to 4 percent target range.
“Better weather conditions in most of the country so far in March 2025, especially in northern Philippines, with some rains due to La Nina that is expected to last until 1Q (first quarter) 2025, could somewhat help increase agricultural production that could help increase local supplies,” Ricafort said.
He added that while meat prices remained relatively elevated, this would be offset by higher pork imports as well as the imposition of the maximum suggested retail price on pork on March 10.
“The initial implementation of the maximum suggested retail price of imported rice on January 20, 2025, the declaration of a food security emergency on February 3, 2025, as well as world rice prices at the lowest in more than 3 years could all help further reduce local rice prices, which account for about 9 percent of the inflation basket,” Ricafort said.
Ricafort said lower US dollar-peso exchange rate at 57.20 this month from 57.99 in February also helped lower importation cost which could lead to some easing in overall inflation.
He noted that the decline in global crude oil prices will also help ease inflation.
Ricafort said that with inflation comfortably settling within target, the BSP will have more room to further reduce interest rates.
The Philippine Statistics Authority is scheduled to release the March 2025 inflation data on April 4. (PNA)
