Price pressures have been gradually building in recent months, even as February inflation remained within the central bank’s target and broadly in line with market expectations, according to economist Jonas Ravelas.
Headline inflation rose to 2.4 percent year on year in February, up from 2.0 percent in January, but still within the 2.3 to 3.1 percent forecast range of the Bangko Sentral ng Pilipinas (BSP).
Average inflation in the first two months of the year reached 2.2 percent, still below the BSP’s 3 percent full-year target but within its tolerance band of ±1 percentage point.
Ravelas said the latest data point shows inflation remains manageable but warned that risks are starting to build after several months of increases.
“February inflation came in at 2.4% year-on-year, in line with expectations but slightly higher than January, driven mainly by rising food prices. While inflation remains manageable, the third straight monthly uptick tells us upside risks are building—especially if global oil supply disruptions persist. From a policy standpoint, I still see room for one more 25-basis-point BSP rate cut in 2026, but policymakers will need to stay data-dependent.”
Food prices accounted for most of the increase in February. Inflation for vegetables, fish and seafood rose due to weather-related disruptions and the implementation of the closed fishing season.
Rice inflation continued to decline but at a slower pace as supply conditions tightened during the lean season and after import restrictions imposed in late 2025.
Price increases were also recorded in non-food categories, particularly housing, water, electricity, gas and other fuels, as well as restaurants and accommodation services.
Inflation for the lowest 30 percent income households rose to 2.5 percent in February, up from 1.6 percent in January.
On a seasonally adjusted basis, month-on-month inflation accelerated to 0.4 percent in February from 0.1 percent in January, while core inflation—which excludes volatile food and energy prices—inched up to 2.9 percent from 2.8 percent.
The BSP said the Monetary Board will remain vigilant and guided by incoming data as it assesses price developments.
The central bank added that it is closely monitoring developments in the Middle East, particularly the potential impact of higher oil prices on inflation, and will ensure that policy settings remain consistent with maintaining price stability while supporting sustainable economic growth.
