February inflation may exceed target – BSP

Inflation is expected to accelerate to 5.1% in February amid rising fuel and food prices, Philippine central bank governor Benjamin E. Diokno said on Friday.

The Bangko Sentral ng Pilipinas (BSP) expects the consumer price index to be between 4.3% and 5.1%, beyond its target of 2-4% this year and faster than 4, 2% in January.

“The upward pressure on prices for the month emanates from the continued rebound in world crude oil prices and high fish prices,” Diokno told reporters in a message from the Viber group.

inflation could top 4% through the third quarter due to supply pressures and base effects, Diokno said separately in a Manila Times forum on Friday.

“Inflation is seen to decelerate below the midpoint of the target range for Q4 2021 and Q1 2022 due to negative base effects before settling near the midpoint for the second half of 2022,” he said .

Global oil prices have rebounded in recent weeks amid supply disruptions caused by extreme weather in the US and as demand gradually recovers.

At home, prices for gasoline, kerosene and diesel rose P3.05, P2.90 and P3.30 this month, according to data from the Department of Energy.

Meanwhile, the open fishing season and the lifting of the fishing ban in some parts of the country are expected to lower fish prices, especially for household staples such as round scad or galunggong.

Diokno said lower electricity rates and temporary maximum prices for meat products in Metro Manila, as well as stable rice prices, could somehow boost inflation this month.

The government imposed a 60-day maximum price on some pork and chicken products and boosted pork imports to counter high prices caused by an outbreak of African swine fever. Some vendors have chosen not to sell these products.

Data from the Philippine Statistics Authority showed that the average wholesale price of regular milled rice fell 0.1% to P33.31, while the retail price fell 0.03% to P36.14.

Manila Electric Co. said this month that typical household electricity bills could drop by P14 in February.

The central bank kept reverse buyback, loan and overnight deposit rates at 2%, 2.5% and 1.5%, respectively, on February 11, after inflation accelerated to a two-year high last month. Last year, it cut rates by 200 basis points.

The Monetary Board will hold its next policy-setting meeting on March 25.