· Year-on-year headline inflation rate in the Philippines increased by 8.5 percent in March, similar with the inflation rate posted in February. Inflation a year ago was 4.2 percent.

· Excluding selected food and energy items, core inflation slightly slowed down by 0.1 percentage point to 8.0 percent in March from 8.1 percent in February.

· Inflation rate in the National Capital Region (NCR) further decelerated to 8.7 percent in March from 8.8 percent in February primarily due to a 0.3 percentage point reduction in the inflation rate of food, beverages and tobacco (FBT). Slower rate recorded in fuel, light and water (FLW) also contributed to the downtrend.

· For three consecutive months, inflation rate in Areas Outside the National Capital Region (AONCR) was at 8.3 percent.

• Month-on-month inflation slightly went up to 0.3 percent in March from 0.2 percent in February. This was primarily effected by the increments in the prices of selected food items such as rice, corn and meat. Moreover, price additions in gasoline, diesel and engine oil also contributed to the upward movement.

CONSUMER PRICE INDEX
(2000=100)
MARCH 2005

l By Region, Year-on-Year

· The inflation rate in NCR slightly slid by 0.1 percentage point to 8.7 percent in March from 8.8 percent in February.

· Inflation rate in AONCR still remained at 8.3 percent. Five regions registered higher inflation rates. The biggest increment of 0.4 percentage point (7.9 percent from 7.5 percent) was noted in Cagayan Valley. The highest rate was still observed in Southern Mindanao at 10.7 percent while the lowest rate was in MIMAROPA at 6.9 percent.

l By Commodity Group, Year-on-Year

· Inflation rate for clothing grew to 3.7 percent in March from 3.5 percent in February; housing and repairs (H&R), 4.7 percent from 4.5 percent; and services, 14.0 percent from 13.4 percent. Meanwhile, inflation for FBT and FLW correspondingly slid to 7.2 percent and 18.3 percent from 7.6 percent and 18.7 percent, respectively. Inflation for miscellaneous items retained its February rate of 3.1 percent.

· The inflation rate for food alone eased to 7.4 percent in March from 7.8 percent in February.

· Slower rates were seen in the prices of corn, 9.9 percent in March from 11.6 percent in February; cereal preparations, 9.5 percent from 9.7 percent; eggs, 2.5 percent from 4.2 percent; fish, 8.8 percent from 9.3 percent; fruits and vegetables, 7.4 percent from 9.4 percent; and meat, 8.1 percent from 8.8 percent. On the other hand, inflation for rice and dairy products correspondingly went up to 4.9 percent and 13.4 percent from their respective last month’s rates of 4.8 percent and 12.7 percent. Miscellaneous foods moved up by 6.1 percent, same rate recorded in February.

· In NCR, inflation rates for FBT and FLW slipped to 5.1 percent and 28.9 percent in March from 5.4 percent and 31.1 percent in February. However, higher rates were noted in the prices of clothing items, 3.3 percent from 3.2 percent; H&R items, 6.1 percent from 5.5 percent; and services items, 13.2 percent from 12.1 percent. Inflation for miscellaneous items remained at 2.8 percent.

• The inflation rate for food alone in NCR improved to 5.2 percent in March from 5.5 percent in February.
• Inflation for eggs further fell to -6.5 percent in March from -2.5 percent in February. Moreover, annual price hike in corn slowed to 5.8 percent from 6.2 percent; cereal preparations, 9.5 percent from 10.7 percent; fruits and vegetables, 4.7 percent from 7.9 percent; and miscellaneous foods, 2.4 percent from 2.8 percent. On the contrary, inflation for rice climbed up to 1.2 percent from 0.3 percent; dairy products, 12.2 percent from 11.2 percent; fish, 7.5 percent from 7.0 percent; and meat, 7.6 percent from 7.0 percent.

· In AONCR, inflation rate for clothing increased to 3.9 percent in March from 3.7 percent in February; FLW, 13.1 percent from 12.8 percent; services, 14.4 percent from 14.1 percent; and miscellaneous items, 3.3 percent from 3.2 percent. Meanwhile, inflation for FBT and H&R correspondingly decelerated to 7.9 percent and 3.8 percent from 8.3 percent and 3.9 percent.

• Inflation rate for food alone in AONCR slid to 8.1 percent in March from 8.5 percent in February.
• Slower annual rates were observed in the prices of corn, 10.0 percent in March from 11.7 percent; eggs, 5.7 percent from 6.3 percent; fish, 9.2 percent from 9.9 percent; fruits and vegetables, 8.2 percent from 9.9 percent; and meat, 8.4 percent from 9.7 percent. Meanwhile, higher annual rates were recorded in the prices of cereal preparations at 9.5 percent from 9.3 percent; dairy products, 13.9 percent from 13.3 percent; and miscellaneous foods, 7.7 percent from 7.6 percent.
• The annual price increment in rice at 5.5 percent in March was the same rate registered in February. Five regions posted higher rates. The biggest jump at 0.6 percentage point (2.5 percent from 1.9 percent) was seen in Bicol followed by Central Luzon at 0.5 percentage point (1.3 percent from 0.8 percent).

l By Region, Month-on-Month

· The month-on-month inflation rate in NCR slightly eased to 0.1 percent in March from 0.2 percent in February as prices of FLW items further dropped to -3.3 percent from -0.7 percent. Moreover, add-ons in the prices of H&R and miscellaneous items improved to 0.6 percent and 0.1 percent from 1.2 percent and 0.3 percent. Prices of FBT and services items however, picked up to 0.2 percent and 1.1 percent from -0.4 percent and 0.2 percent. Price gains in clothing items were still at 0.2 percent.

· Prices in AONCR slightly grew to 0.4 percent in March from 0.3 percent in February. FLW and services items were priced higher by 0.7 percent and 0.6 percent from -0.1 percent and 0.2 percent. Increases in the prices of clothing, H&R and miscellaneous items were still registered at 0.3 percent. On the other hand, prices of FBT items went up but at a slower rate of 0.2 percent from 0.4 percent. The highest month-on-month inflation at 0.7 percent was posted in Eastern Visayas while the lowest rate was in Central Luzon, MIMAROPA and Western Mindanao at 0.1 percent.

l By Commodity Group, Month-on-Month

· Prices of clothing and services items correspondingly advanced to 0.3 percent and 0.8 percent in March from 0.2 percent in February. Meanwhile, add-ons in the prices of H&R and miscellaneous items slowed to 0.5 percent and 0.2 percent from 0.7 percent and 0.3 percent. Prices of FLW items further went down to -0.7 percent from -0.3 percent while prices of FBT items remained at 0.2 percent.

· The favorable weather condition experienced during the month brought sufficient supply of fruits and vegetables in the markets. Thus, the group’s index in the three areas still posted negative rates: Philippines, -2.3 percent from -2.8 percent; NCR, -2.8 percent from -5.4 percent; and AONCR, -2.2 percent from -1.9 percent.

· The price of rice in the Philippines was up by 0.7 percent; NCR; 1.1 percent; and AONCR, 0.6 percent. Nine regions recorded higher rates.

· Upward adjustments still registered in the prices of cooking oil, coffee, margarine and selected spices and seasonings in many regions pulled up the miscellaneous foods index in the Philippines and AONCR by 0.4 percent and 0.6 percent. However, the group’s index in NCR slightly declined by 0.1 percent due to the reduction in the prices of selected spices and seasonings.

· Lower supply of pork, chicken and beef triggered a 0.6 percent growth in the meat index in the Philippines; 0.7 percent in NCR; and 0.5 percent in AONCR.

· With the observance of the Lenten season, consumers shifted preference from meat to fish. This resulted to higher demand for fish thereby increasing their prices by 0.2 percent in the Philippines; 0.4 percent in NCR; and 0.1 percent in AONCR.

· The dairy products index in the Philippines accelerated by 1.2 percent; AONCR, 1.1 percent; and NCR, 1.6 percent as prices of milk and milk products were still up during the month.

· Higher prices of flour, biscuits, bread and noodles still posted in many regions including NCR effected a 0.5 percent growth in the index for cereal preparations in the three areas.

· The services index grew by 0.8 percent in the Philippines, 1.1 percent in NCR and 0.6 percent in AONCR mainly due to the upward adjustments in the prices of medicines, gasoline, diesel and engine oil. Higher charges for medical, dental and personal services were also recorded in some regions.

· Add-ons in the cost of transportation resulting from the series of fuel increases pushed up prices of cement in many regions including NCR. Moreover, higher prices of plywood, nails, gravel, sand and G.I. sheets were also noted during the month. Thus, the H&R Index in the Philippines climbed up by 0.5 percent; NCR, 0.6 percent; and AONCR, 0.3 percent.

· Lower charges in electricity consumptions in NCR further brought down the FLW index in the area and in the Philippines to -3.3 percent and -0.7 percent from -0.7 percent and -0.3 percent. On the contrary, the group’s index in AONCR was up by 0.7 percent. This can be attributed to the increments in the prices of LPG, kerosene, charcoal and firewood. Higher electricity and water rates posted in selected regions also contributed to the uptrend.

NOTES:

1. The CPI second phase survey reports from the following provinces were not received as of April 5, 2005:
    
   1. Isabela
   2. Zamboanga del Sur
   3. Sultan Kudarat
2. CPIs and inflation rates by province and selected city are also available upon request at NSO, Industry and Trade Statistics Department, Economic Indices and Indicators Division (Telephone Numbers: 716-39-35 and 715-33-47).

Source: National Statistics Office
Manila, Philippines