Positive surprise: Philippine inflation eased to 2.1% in February

A customer buys vegetables at a market in Manila on October 5, 2018.  (Photo by TED ALJIBE / AFP)

MANILA, Philippines –  Inflation slowed to 2.1 percent in February from 2.9 percent in January on the back of easing price pressures from food, utilities and transportation, the Philippine Statistics Authority (PSA) reported on Wednesday.

The latest reading was better than the median estimate of 2.6 percent in an Inquirer poll of economists last week. It was likewise lower than the 2.2 percent to 3 percent forecast range of the Bangko Sentral ng Pilipinas (BSP).

READ: BSP pegs February inflation at 2.2% to 3%.

That price hikes had stayed within the 2 to 4 percent official target means the BSP has enough room to continue with its gradual easing cycle, which would help support economic growth.

READ: February inflation likely moderated to 2.6 percent, says poll

Key indices soften

The downtrend in the overall inflation was primarily influenced by the lower year-on-year growth rate of the heavily-weighted food and non-alcoholic beverages at 0.8 percent during the month from 2.4 percent in the previous month, the PSA reported.

Likewise, the housing, water, electricity, gas and other fuels index rose at a slower pace of 1.7 percent during the month from 2.4 percent in January.

The transport index also eased to 0.2 percent from 1.7 percent in the previous month.

Commodity groups

The PSA also noted lower annual rates in the indices of the following commodity groups:

• Clothing and footwear, 1.9 percent from 2.3 percent;
• Furnishings, household equipment and routine household maintenance, 1.9 percent from 2.4 percent;
• Health, 1.8 percent from 2 percent;
• Recreation, sport and culture, 4.2 percent from 4.5 percent;
• Restaurants and accommodation services, 3 percent from 3.4 percent; and
• Personal care, and miscellaneous goods and services, 2.7 percent from 3 percent.

In contrast, higher annual growth rate was noted in the index of alcoholic beverages and tobacco at 4 percent in February from 3.9 percent in January.