March inflation seen dropping below 2%

Inflation is expected to slow further to 1.9% in March, driven by improved weather conditions that boosted agricultural production, according to an economist.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said in a Viber message that inflation is projected to ease from 2.1% in February, falling below the Bangko Sentral ng Pilipinas’ (BSP) target range of 2-4%.

“Better weather conditions in most of the country so far in March 2025, especially in northern Philippines, with some rains due to La Niña that is expected to last until 1Q 2025, could somewhat help increase agricultural production that could help increase local supplies,” Ricafort said.

He noted that while meat prices remain relatively high, higher pork imports and the implementation of the maximum suggested retail price (SRP) on pork since March 10 are expected to offset these costs.

“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 three years could all help further reduce local rice prices, which account for about 9 percent of the inflation basket,” Ricafort added.

A stronger peso, which settled at 57.20 to the US dollar in March from 57.99 in February, also contributed to lower import costs, easing inflationary pressures. Additionally, declining global crude oil prices further support lower inflation.

With inflation staying within the target range, Ricafort said the BSP may have more flexibility to cut interest rates.

The Philippine Statistics Authority is set to release the official March 2025 inflation data on April 4.