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For Luz Wendy T. Noble, Reporter
KEY INFLATION is likely to have exceeded the central bank’s target for the second month in a row in February, as food and fuel prices remain high, according to economists.
TO Business world The survey of 16 analysts last week returned a median estimate of 4.8%, near the upper end of the estimated range of 4.3% to 5.1% given by Bangko Sentral ng Pilipinas (BSP), but well beyond the 2-4% annual target. .
If done, the median estimate will be even faster than 4.2% in January and 2.6% in the previous year. It would also be the fastest since 5.1% was printed in December 2018.
The Statistics Authority of the Philippines will report February inFloridaAction data as of March 5.
Bank of the Philippine Islands Chief Economist Emilio S. Neri, Jr. said a faster rise in the consumer price index was expected in February as the price of household staples such as meat and the fish kept speeding up.
This despite a government-imposed 60-day maximum price on some pork and chicken products, and plans to allow more pork imports to moderate the price spikes caused by the swine fever outbreak. African. However, on the ground, some suppliers have decided not to sell products due to low profits.
“Imports can help mitigate challenges in the short term, but could cripple an already struggling livestock sector,” he said, noting that longer-term food security will be better ensured through capacity building and programs for support for the industry.
Meanwhile, Rizal Commercial Banking Corp. chief economist Michael L. Ricafort said upside risks inFloridaAction included the upheavals caused by Typhoon Auring in some provinces.
Agricultural damage caused by Typhoon Auring reached P79.38 million, mainly in the Caraga Region.
Rising world prices for soybeans and corn, which are key inputs for pig and chicken feed, also added to inflationary pressure on food prices, said Security Bank Corp. chief economist Robert Dan J. Roces.
Transportation prices may have also seen a faster rebound in the past month amid higher pump prices.
“Oil companies have also continued to increase pump prices this month to reflect the movement in the world oil market; crude oil futures on average have risen 70% since October 2020, ”said Roces.
Last month, the prices of gasoline, kerosene and diesel increased P3.05, P2.90 and P3.30, respectively, according to data from the Department of Energy.
These increases in the prices of petroleum products will have “created a chain reaction with other essential items,” said Emmanuel J. López, dean of the Graduate School of the Colegio de San Juan de Letrán.
At its rate-setting meeting on February 11, the Monetary Board raised its average byFloridaation expected this year at 4% from 3.2% previously. ORfficiales said that upside risks inFloridaAtion emanates from the recovery in oil prices as demand recovers with the easing of restrictive measures around the world.
The Monetary Board will meet on March 25 for its second policy meeting this year.
Analysts said that February inFloridaThe action further strengthens the argument for the central bank to maintain its accommodative stance and refrain from raising benchmark rates.
“A rate hike at this stage will be a blow to consumers and businesses, who are now struggling largely to stay afloat,” said ING Bank NV Manila senior economist Nicholas Antonio T. Mapa, noting that the bank central has already indicated that it is considering a “long pause”.
The country is currently in a negative real interest rate environment with the key policy rate at 2% and atFloridaation at 4.2% as of January.
BSP Governor Benjamin E. Diokno has said they are likely to keep rates low until the economy has fully recovered and when unemployment returns to its pre-pandemic level. He noted that raising interest rates will be “too soon” as 2021 is considered the country’s “recovery year” from recession.
The low base effect of the collapse in world oil prices last year will cause fuel and transportation prices to spike sharply, a reason for the central bank to hold rates for the time being, said Alex Holmes, an economist at Capital Economics. .
“The [inflation] The spike will be temporary and we still expect rate cuts before the end of the year, ”he said.
Last year, the BSP cut rates by a total of 200 basis points to support the virus-hit economy. This lowered overnight, loan and deposit reverse repurchase rates to historic lows of 2%, 2.5% and 1.5%, respectively.
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