An economist-lawmaker on Wednesday said the slowdown of the inflation rate in March would give the country’s economy ample room to absorb potential external shocks in the global monetary and financial environment.

Albay Rep. Joey Salceda said the decline in inflation also anchored inflation expectations, which would allow businesses and consumers to make firmer decisions about their spending and investing activities this year.

Salceda expressed hope that the country could meet the central bank’s 2 percent to 4 percent inflation target by October this year.

“I sustain my observation that general price levels will continue to decline moving forward. We will hit BSP (Bangko Sentral ng Pilipinas) inflation targets by October, if not earlier. But the annual average price levels are likely to be above 5 percent for the full year 2023,” he said.

He noted that food is significantly cheaper this month compared to last month, with a month-on-month inflation rate of negative 1.2 percent.

Vegetables, in particular, are 14.1 percent cheaper this month compared to last month, while corn is cheaper at negative 0.7 percent month on month, he added.

“Onion farm gate prices, in particular, have now hit the PHP50 range in many areas, as I predicted some weeks ago,” he said.

Salceda noted that rice liberalization continues to show its benefits on the consumer side, with year-on-year inflation at only 2.6 percent, well within the BSP target.

“There are signs of impending price hikes in rice, however, so we have to watch out to make sure the price increases, if needed, are not above necessary. El Niño is the main upside risk, moving forward,” he said.

He emphasized the need to implement measures regarding irrigation maintenance and coverage, urging President Ferdinand R. Marcos Jr. to formalize his directives to the water management agencies in an executive order.

He, however, pointed out that corn remains expensive at 11.7 percent year-on-year inflation, which will continue to have impacts on the price of meat, fish, processed food, and other key commodities.

“There are signs of a downward momentum in prices, with month-on-month inflation being at negative 0.7 percent, but El Niño looms large as an upside risk to price,” he said.

Flour and bread remain expensive at 11.7 percent year-on-year inflation due to the Russia-Ukraine conflict, while fish and seafood prices are still high due to the Mindoro oil spill and the generally warmer climate, he added.

The Philippine Statistics Authority reported the second consecutive month of deceleration of the inflation rate to 7.6 percent in March from February’s 8.6 percent, bringing the average inflation for the three-month period to 8.3 percent.

Core inflation, which excludes volatile oil and food items, meanwhile, accelerated to 8 percent last month from 7.8 percent in February.

March’s inflation rate was within the central bank’s 7.4 percent to 8.2 percent projection for the month.

The BSP said it is “consistent with the overall assessment that inflation will remain elevated over the near term before gradually decelerating back to target range towards end-2023.” (PNA)