Inflation rose to 3.3 percent in February, a 27-month high, on the back of higher prices of both food and nonfood products, such that the government this early expected the yearend figure to hit the top end of its target range.
Headline inflation last month was the fastest since November 2014, when it hit 3.7 percent, and faster than the 2.7 percent rate of increase in the prices of basic goods in January, Philippine Statistics Authority data showed.
As such, end-February inflation averaged 3 percent, or at the middle of the government’s 2-4 percent target range.
“This confirms our expectations that the monthly path of inflation will move up, and that the average for the year will be within target,” Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said in a text message to reporters.
In a statement, state planning agency National Economic and Development Authority said the food subgroup inflation rose 4.3 percent in February from January’s 3.6 percent due to the uptick in the prices of fish, meat, rice and vegetables.
“For meat products, the country’s temporary ban on poultry imports from South Korea, Germany, France, Netherlands, Czech Republic and Kuwait in response to the avian flu outbreak may have contributed to the limited supply,” Neda said.
“Also, the higher rice prices can be attributed to lower rice stock inventories, which fell by 17.9 percent (month-on-month) in January, due to the contraction in palay production in the fourth quarter of 2016,” it added.
Nonfood inflation, meanwhile, grew to 2.5 percent in February compared with 2 percent in the previous month as prices of electricity, gas, housing and water increased.
Socioeconomic Planning Secretary Ernesto M. Pernia said that as a whole, “the inflation outlook for 2017 remains within the government’s target of 2-4 percent.”
“However, risks to the inflation outlook appear to be tilted to the upside. This could drive inflation toward the higher end of the target,” Pernia said.
“The risks to inflation that we see on the external side include increase in the price of oil and the depreciation of peso,” Pernia said.
“Another risk may come from the National Food Authority’s memorandum that allowed the entry of rice imports under the minimum access volume program only from October 2016 until Feb. 28, 2017. This will tighten rice supply, which translates to higher food prices,” he said.