March 26, 2003 - Despite the outbreak of war in Iraq, the domestic
inflation rate may slow down to 3.0% in March from 3.1% in February
as prices of consumer goods have remained stable and government
built up its rice inventory due to the mild dryspell. Furthermore,
the P0.40 per liter cut in diesel prices due to falling crude
prices abroad has delayed action on pending fare hike petitions
by jeep and bus operators.
On the other hand, other pressures pushing up consumer prices
are the foreign exchange rate depreciation in February and
the increase in purchased power cost adjustments. To mop up
money supply, the Bangko Sentral recently raised the liquidity
reserve requirement of banks and removed the three-tier scheme
on its overnight borrowing transactions with banks.
