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Philippines: Expensive meat, higher power bills seen keeping inflation beyond target in April

  • Apr 30, 2021

MANILA, Philippines — Consumer price growth likely stayed beyond government expectations in April driven by more expensive meat products, particularly pork, and higher power costs.

Inflation likely settled between 4.2%-5.0% this month, economists at the Bangko Sentral ng Pilipinas said on Friday.

If the upper-end of the forecast range is realized, that would exceed the 4.5% print recorded in March. As it is, the range is still running above the BSP’s 2%-4% annual target and it would be the fourth straight month that inflation would break the central bank’s ceiling.

In a statement, the BSP explained that lower pump prices might have helped ease inflation this month. Fruits and vegetables were also more affordable in April due to improved supply conditions, further softening overall price spikes.

But that was likely offset by higher electricity bills in areas served by Meralco, the country’s largest power distributor. For this month, a typical household consuming 200 kilowatt per hour will see bills increase by an average of P17 amid the seasonal spike in power consumption during the summer.

Adding some upward price pressures are costlier meat products, especially pork amid supply problems due to the lingering African swine fever outbreak. Prices of fish, an alternative protein source, also went up last month as well as rice, the staple grain.

That said, the BSP assured the public it will remain vigilant for any sharp increase in prices that, if uncontrolled, could force monetary authorities to prematurely withdraw support to the pandemic-battered economy by jacking up interest rates.

“Moving forward, the BSP will continue to monitor evolving economic and financial conditions to ensure that the monetary policy stance remains consistent with the BSP’s price stability mandate,” the central bank said.

Source: https://www.philstar.com/business/2021/04/30/2094913/expensive-meat-higher-power-bills-seen-keeping-inflation-beyond-target-april