Inflation is expected to pick up slightly in February but remain within the government’s target, according to Metropolitan Bank & Trust Company (Metrobank).
The bank forecasts headline inflation to settle at 2.4 percent for the month, still inside the 3±1% target band set by the Bangko Sentral ng Pilipinas (BSP).
Metrobank said food, electricity, and rental costs will likely push inflation higher.
Rice prices remain a key factor. While rice prices are still lower than a year ago, the pace of decline has slowed. Farmgate prices rose month-on-month after the Department of Agriculture imposed a four-month import ban to protect local farmers. Delays in the arrival of new imports kept retail prices elevated into early February.
Onion prices, however, are falling as the harvest season approaches, helping ease overall food inflation. Still, vegetables, fruits, and seafood may post faster annual price increases due to “low base effects,” meaning prices were unusually soft during the same period last year.
Pork prices may provide some relief. A decline in African Swine Fever cases has allowed hog production to recover, which could help stabilize supply and prices.
Electricity rates are higher compared with a year ago, particularly in provincial areas such as those served by Davao Light and Visayan Electric. This is expected to add pressure to February inflation.
Fuel prices increased month-on-month, but on a yearly basis gasoline and diesel remain cheaper, reflecting swings in global oil markets.
Rent was one of the top inflation contributors in January, as many lease contracts are renewed and repriced at the start of the year. Metrobank expects rental costs to rise further in February and March as more contracts are adjusted.
For households, the slight uptick in inflation means continued pressure on food, electricity, and housing budgets. However, inflation staying within the BSP’s target range suggests price increases remain manageable overall.
For businesses, especially those in food retail, utilities, and property, higher input and rental costs may squeeze margins. Companies may need to balance passing on higher costs to consumers while remaining competitive.
Metrobank said the expected pickup in inflation could steepen the bond yield curve in the coming months, as investors demand higher returns for longer-term loans. Faster inflation may also limit how aggressively the BSP can cut interest rates, which could help support the peso.
Overall, while price pressures are building, inflation remains under control for now.
