HIGHER prices of key food items, coupled with residual pressure from transport and fuel costs, could have pushed inflation up in February, analysts said.
The median forecast in a Manila Times poll was 2.5 percent, within the Bangko Sentral ng Pilipinas’ (BSP) estimate of 2.3 to 3.1 percent for the month and higher than January’s 2.0 percent.
If realized, inflation would have risen for a third straight month but remained within the central bank’s 2.0- to 4.0-percent target.
The Philippine Statistics Authority will release February inflation data this Thursday, March 5.
Emmanuel Lopez of the University of Santo Tomas Graduate School bucked the outlook with the lowest forecast of 1.8 percent, pointing to “relative stability” in consumer goods, particularly agriculture products.
Union Bank of the Philippines chief economist Ruben Carlo Asuncion, on the other hand, said inflation could have picked up to 2.2 percent on the back of firmer food prices, particularly rice and select fresh produce, as supply conditions remained tight in some areas.
“There was also some residual pressure from transport and fuel costs, although these were not broad‑based enough to significantly alter the overall inflation path,” he said.
“Despite the slight rise, nonfood inflation stayed generally benign, keeping underlying price pressures contained,” Asuncion added.
“Looking ahead, we expect inflation to remain well‑anchored in the near term, which should give the BSP room to gradually shift toward a more accommodative stance later in the year, provided food supply risks and global oil price volatility remain manageable.
Metrobank Research, meanwhile, said low base effects could have started kicking in and fan inflation moving forward.
“Food, energy, and rental prices will continue to drive headline inflation in February,” it said, forecasting a 2.4-percent result with rice and onion prices only partly providing a reprieve.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the rate could have risen to 2.5 percent, driven by higher global crude oil prices, as well as increased prices of industrial metals and other commodities.
He added that recent geopolitical risks involving Iran, Venezuela and Greenland may push up import costs, which could further add to overall inflation.
With the highest forecasts, Security Bank Corp. chief economist Angelo Taningco, Philippine National Bank economist Alvin Arogo and HSBC Global Research economist Aris Dacanay said inflation likely rose further to 2.6 percent.
“This is based on higher food inflation, excise tax hikes on sin products, rate increases in utilities, sequential fuel cost growth, rising housing rent inflation, and higher prices in education, health,” Taningco said.
Arogo, meanwhile, said base effects alone could account for about half of the 0.6-percentage point increase.
This was echoed by Dacanay, who said the outcome was largely expected due to base effects but added that the pace of acceleration was faster than anticipated.
“Vegetable, pork, and poultry prices moderated in February, but these were likely not enough to offset the inflationary pressures brought by rice,” he said.
“In addition, energy prices also rose in February. Fuel prices rose on the back of a jump in global oil prices while electricity rates in Metro Manila were hiked due to higher transmission charges.”
BSP to monitor developments
The BSP last Friday said inflation risks could come from higher prices of rice and fish, higher fuel costs, and increased electricity rates. These could be partly offset by lower prices of vegetables, fruits, and meat, as well as a stronger peso.
“The BSP will continue to monitor domestic and international developments to ensure that its policy settings remain consistent with the pursuit of price stability conducive with sustainable growth and employment,” it added.
During their last policy meeting in February, monetary officials said that inflation forecasts for this year had “risen slightly, due mainly to supply-side pressures that were likely to be temporary.”
The outlook for consumer price growth, however, was said to still be manageable.
The February inflation result, along with data for March that will be released on April 7, will be considered by the BSP’s policymaking Monetary Board during its next rate-setting meeting on April 23.