MANILA – Rate of price increases in the Philippines decelerated to 2.6 percent last February from month-ago's 2.9 percent, and the Bangko Sentral ng Pilpinas (BSP) said this is expected as it sees full-year average to hit 3 percent.
Last month’s inflation rate is also within the BSP’s 2.4-3.2 percent forecast for the month, with the slowdown traced to a slower rate of the heavily-weighted food and non-alcoholic beverages index.
“The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation is expected to steadily approach the midpoint of the target range in 2020 and 2021,” the BSP said in a statement.
Data from the Philippine Statistics Authority (PSA) showed that the average inflation rate in the first two months this year stood at 2.8 percent, near the middle of the government’s 2-4 percent target band.
Excluding volatile food and oil items, core inflation also slowed to 3.2 percent from the previous month’s 3.3 percent.
The central bank said risks to this year’s inflation outlook leans on the upside due to higher utility rates, fare rate hike petitions, and the impact of the African swine fever (ASF) on meat prices.
“The ongoing spread of Covid-19 (coronavirus disease 2019) could have an adverse impact on domestic economic activity and financial market sentiment in the coming months,” it said.
The statement said all these developments will be looked into during the rate-setting meet of the BSP’s policy-making Monetary Board (MB) on March 19, the second for the year.
“The BSP will ensure that the monetary stance remains consistent with its primary objective of maintaining price stability that is conducive to the balanced and sustainable growth of the economy,” it added.
During the MB’s rate-setting meet last February, the Board slashed the central bank’s key policy rates by 25 basis points as inflation remains within target and growth seen to stay firm despite the challenges both here and abroad.
BSP Governor Benjamin Diokno earlier said they were reviewing the central bank’s economic projections for this year, which is regularly done twice a year, especially since global growth is now expected to take a hit from the impact of the epidemic from Covid-19, which started in China but has affected other countries.
Several countries have reported a high number of cases and death from the disease, including South Korea, Japan, the US, Iran, and Italy. (PNA)
