AFTER hitting a two year high in January, the Philippines’s inflation number is expected to have accelerated further in February on the back of higher prices of fuel and select food items.
In a message to reporters on Friday afternoon, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said he expects inflation to have hit 4.7 percent in February.
“Upward price pressure for the month emanated from the continued global crude oil prices and elevated fish prices,” Diokno said.
The 4.7-percent inflation forecast is higher than the 4.2-percent actual inflation print in January and above the BSP’s 2-percent to 4-percent target range for the year. It will also be the fastest inflation rate for the country since December 2018 when inflation hit 5.1 percent.
Diokno further said that the range of inflation for February is between 4.3 percent and 5.1 percent.
In their previous monetary-policy meeting in February, the BSP announced a revision in their inflation forecast for the year from 3.2 percent to 4 percent.
This prompted several analysts and economists to believe that the BSP will likely keep all its monetary-policy levers on hold and unchanged for the entire 2021, a stark contrast to its aggressive stance last year when it cut monetary-policy rates by a total of 200 basis points to support the ailing economy.
Inflation could have accelerated further in February, Diokno said, if not for some local developments that partially offset the rise.
“The implementation of the temporary price caps on mean products for NCR, stable rice prices and lower power rates in Meralco-serviced areas contributed to the downward price pressures during the month,” he explained.
Despite the expected rise, Diokno still maintained his stance of being “ready to take action” when called for by the economy.
“Looking ahead, the BSP stands ready to take necessary policy actions to ensure the delivery of its primary mandate of price stability conducive to a balanced and sustainable economic growth,” Diokno said on Friday.
In the February monetary-policy meeting, Diokno maintained confidence that inflation will remain manageable in the policy horizon.
“The Monetary Board is of the view that the manageable inflation outlook continues to allow the BSP to maintain an accommodative policy stance and thus complement crucial fiscal policy measures in supporting economic activity and market confidence,” Diokno earlier said.
The BSP is expected to meet next on March 25 for the second monetary-policy meeting of the year, where it is expected to keep rates on record lows in the face of the rising prices and continued economic recession.