Following a four-month period of stagnation, there was a noticeable increase in inflation, with 3.4 percent recorded in February. The cost increases of staple foods, especially rice, were the main cause of this acceleration.
The Philippine Statistics Authority released data on Tuesday that showed the inflation rate for February was much higher than the 2.8 percent recorded in January. In spite of this increase, the percentage stayed within the 2.8 to 3.6 percent prediction range provided by Bangko Sentral ng Pilipinas. Notably, inflation in February remained within the government’s goal range of 2 to 4 percent for the third consecutive month.
The Monetary Board decided to keep the benchmark rate at 6.5 percent, the highest level in more than 16 years, at its most recent meeting. With the continued threats to the inflation forecast in mind, the Bangko Sentral ng Pilipinas described its decision as “prudent”.
The elevated transit fees, higher electricity rates, and rising oil and domestic food prices are the central bank’s present concerns. Furthermore, the Bangko Sentral ng Pilipinas is closely monitoring the possible effects of a significant El Niño episode on food costs.
The central bank predicts that inflation will moderate in the first quarter of the year and then rise beyond the goal in the second quarter when the beneficial base effects fade. The third quarter is then anticipated to see price growth return to the goal range, with an average of 3.6 percent predicted for the year’s end. The Bangko Sentral ng Pilipinas’s prior baseline prediction of 3.7 percent is little lower than this expectation.
