*
March CPI marks lowest annual rise in six months
*
But core inflation remains elevated
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C.bank says to ensure policy stance contains inflation
(Adds finance secretary's comments in paragraphs 10-11)
By Neil Jerome Morales and Enrico Dela Cruz
MANILA, April 5 (Reuters) - Philippine annual inflation
eased for a second consecutive month in March on slower rises in
food and transport costs, data showed on Wednesday, supporting
the case for the central bank to consider a pause in its
monetary tightening cycle.
The consumer price index rose 7.6% in March, the
statistics agency said, below an 8.0% forecast in a Reuters poll
and marking the slowest pace of price increases in six months.
However, confusing the picture core inflation accelerated to 8.0% in March from February's 7.8%, the fastest pace since 1999. "While inflation is beginning to slow down, it remains the most pressing issue that the government must monitor and urgently address," Economic Planning Secretary Arsenio Baliscan said in a statement. To tackle inflation, the Bangko Sentral ng Pilipinas (BSP) has raised its benchmark interest rate by a total 425 basis points since May last year to 6.25%, and its governor, Felipe Medalla has said future policy moves would be data-dependent. "The BSP will continue to adjust its monetary policy stance as necessary to prevent the further broadening of price pressures," the BSP said in a statement, calling for "timely and effective" implementation of non-monetary measures to keep prices in check.
Nicholas Mapa, an economist at ING bank, said a sustained
downtrend in inflation could make the BSP consider hitting the
pause button on its most aggressive interest rate hiking cycle
for years.
"Today's inflation reading could be one additional data
point that could convince Governor Medalla that inflation is
finally moderating," Mapa told Reuters.
"We expect inflation to moderate further in April which
could open up the door for a BSP pause at the May meeting."
Finance Secretary Benjamin Diokno, who is one of the seven
members of the central bank's policy making monetary board, said
the slower-than-expected pace of March inflation "supports my
view that the monetary authorities have done enough to tame
inflation."
"We remain focused on treating inflation as an immediate
and long-term concern," Diokno said in a statement.
(Writing by Karen Lema; Editing by Ed Davies)
