Headline inflation in February accelerated to 3.4 percent after easing to its slowest pace in more than three years in January, settling at the higher end of the forecast range of the Bangko Sentral ng Pilipinas due to increases in the prices of food, particularly rice, and the cost of transport and utilities.
Inflation in February last year was 8.6 percent.
The BSP projected February inflation to settle within the 2.8-3.6 percent range after inflation eased in January to 2.8 percent, its slowest clip since October 2020.
The Philippine Statistics Authority said Tuesday that food inflation rose 4.8 percent in February, a faster clip than January’s 3.3 percent, on higher cost of rice and meat. Nearly half of inflation movement was accounted for by food in February.
“Rice is the real trigger,” said Economic Planning Undersecretary and National Statistician Dennis Mapa. “The 23.7 percent increase in the price of rice recorded in February was the highest since the 24.6 percent recorded in February 2009.”
Mapa said that given the low price base for rice last year and if actual prices don’t decline in the coming months, higher inflation rate for the national food staple should stay elevated through July or August, undermining the spending power of the poor.
Inflation for the bottom 30 percent of all income households stood at 4.2 percent in February, with 3.3 percentage points accounted for by higher cost of rice. Inflation for this group was at 3.6 percent in January.
Core inflation, which excludes selected food and energy items, slowed to 3.6 percent.
Inflation averaged 3.1 percent in the first two months of the year, within the BSP’s 2.0-4.0 percent target range for this year. Inflation is a primary consideration for the central bank in determining policy rates. Soaring inflation rate has forced an aggressive monetary policy tightening.
