April inflation rises to 4.9%

·3 min read

THE country’s inflation rate increased further to 4.9 percent in April this year from four percent in March.

The Philippine Statistics Authority (PSA) said Thursday, May 5, 2022, that this is the highest recorded inflation since January 2019. Inflation in April 2021 was lower at 4.1 percent.

The average inflation for the first four months of the the year stood at 3.7 percent.

April inflation rate for Central Visayas rose to 5.4 percent from five percent in March. Transport inflation in the region accelerated to 16.1 percent from 8.9 percent in March.

The country’s food inflation increased from 2.8 percent in March to four percent in April. Faster inflation rates for meat, fish, vegetables, sugar, flour and oils contributed to higher food inflation.

“World commodity prices remain high as a consequence of the ongoing Russia-Ukraine war. The impact is felt domestically not just on food and basic goods but also on transport and utilities. To address this, we have put in place a comprehensive set of interventions for all affected sectors,” said Socioeconomic Planning Secretary Karl Kendrick Chua in a statement.

Meanwhile, non-food inflation increased from five percent to 5.4 percent, mainly due to elevated oil prices.

Electricity, gas and other fuels for household inflation increased from 17.4 percent to 19.9 percent. Transport inflation also increased from 10.3 percent to 13 percent, with private transport inflation rising from 35.2 percent to 44.4 percent.

On the other hand, public transport inflation remained muted at 0.8 percent as fares were unchanged.

Inflation within range

The central bank said Thursday the April inflation is within its forecast range of 4.2 percent to five percent.

“The inflation outturn is consistent with the BSP’s assessment that inflation will remain elevated over the near term due to the continued volatility in global oil and non-oil prices, reflecting largely the continued impact of the conflict in Ukraine on global commodities market,” Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said in his tweet.

He noted that inflation could settle above the government’s target range in 2022, before decelerating back to target in 2023 as supply-side pressures ease.

While there are signs that inflation expectation is higher for 2022, it remains broadly anchored to the target in 2023, the BSP chief said.

Inflation risks are also tilted to the upside in 2022, but broadly balanced for 2023.

“Upside risks over the near term continue to emanate from the shortage in domestic food supply as well as from the potential impact of higher oil prices on transport fares. Meanwhile, downside risks are linked mainly to the lingering threat of Covid-19 infections, as the emergence of new variants could temper the global economic recovery and prompt the reimposition of containment measures,” the BSP said.

Latest assessment, according to the central bank, also indicates that domestic economic activity has gained stronger traction with the easing of remaining mobility restrictions.

“However, heightened geopolitical tensions and a resurgence in Covid-19 infections in some countries have also clouded the outlook for global economic growth. Supply-chain disruptions could also contribute to inflationary pressures, and thus warrant closer monitoring to enable timely intervention in order to arrest potential second-round effects,” the BSP said.

Diokno said the Monetary Board will review its assessment of the inflation outlook and macroeconomic prospects with the release of the first quarter gross domestic product growth outturn, along with evidence of possible second round effects and developments in inflation expectations during the monetary policy meeting on May 19, 2022. / KOC

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