The increase in prices of consumer goods likely sustained its accelerated pace in March, economists said, such that most inflation forecasts for the month breached the upper end of the government’s 2-4 percent target range.

Using the old consumer price index (CPI) base year of 2006, Pauline May Ann E. Revillas of Metropolitan Bank and Trust Co.’s research department projected headline inflation rate of 4.7 percent year-on-year last month “amid high food prices (especially of rice, fish, meat and vegetables), hike in electricity rates and higher petroleum product prices.”

The government will release the March inflation figure on Thursday, April 5.

Ateneo de Manila University economics professor Alvin P. Ang’s forecast was a slightly higher 4.8 percent, citing that “the pass-through effects of the TRAIN Law are still continuing plus the weakening of the peso and the recent increases in power and oil,” referring to the Tax Reform for Acceleration and Inclusion Act.

Signed by President Duterte in December, the TRAIN Law since Jan. 1 this year jacked up or slapped new excise taxes on oil, cigarettes, sugary drinks and vehicles, among other goods, to compensate for the restructured personal income tax regime that raised the tax-exempt cap to an annual salary of P250,000.

At 4.7-4.8 percent, inflation would be the fastest since July and August 2014’s 4.9 percent.

Using the new CPI base year of 2012, Land Bank of the Philippines market economist Guian Angelo S. Dumalagan’s forecast for March was 4.4 percent “amid faster increases in the prices of petroleum products as well as food and non-alcoholic beverages.”

“The costs of these goods accelerated, fueled by the hike in excise taxes under the TRAIN Law and the depreciation of the peso, which made foreign goods and services more expensive in local currency terms,” Dumalagan explained.

For Bank of the Philippine Islands vice president and chief economist Emilio S. Neri Jr., March inflation rose 4.3 percent year-on-year on higher cost of utilities and petroleum prices.

Nomura economist Euben Paracuelles as well as University of Asia and the Pacific economics professor Victor A. Abola projected 4.2 percent, with the latter blaming petroleum products as the main driver of price increases.

An outlier is the forecast of 3.7 percent, or within government target, by Capital Economics Asia economist Alex Holmes.

“While the inflationary effects of tax hikes under TRAIN are still likely to be feeding through, on the other hand the temporary spike in food prices is likely to unwind over the next few months,” Holmes said.

The inflation averaged 3.7 percent during the first two months, with the 3.9 percent in February the fastest in over three years.

Last month, the Bangko Sentral ng Pilipinas raised its inflation forecast for 2018 to 3.9 percent from 3.8 previously.

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