In Feb, the rate of inflation surged to 3.4 percent

In February, inflation in the Philippines rose to a two-month high of 3.4 percent, up from 2.8 percent in January, ending a four-month streak of decline. This uptick was mainly driven by faster increases in food prices like rice and meat, as well as transport costs.

However, despite this increase, February’s inflation rate was lower compared to the 8.6 percent recorded in the same month last year and fell within the forecast range of 2.8 percent to 3.6 percent by the Bangko Sentral ng Pilipinas (BSP).

The recent rise in inflation contrasts with the downward trend observed since September 2023, according to National Statistician Dennis Mapa. Food and non-alcoholic beverages, particularly rice and meat, were significant contributors to the inflationary pressure, with rice experiencing its highest inflation rate since February 2009.

Mapa highlighted the impact of rising global rice prices, which have led to increases in all three rice classifications tracked by the Philippine Statistics Authority. He anticipates continued high rice inflation until July or August if prices persist.

In addition to food, the transport sector and housing, water, electricity, gas, and other fuels also contributed to the inflationary uptrend in February.

The government, led by National Economic and Development Authority Secretary Arsenio Balisacan, emphasized the importance of monitoring food supply and prices to ensure affordability, especially for vulnerable sectors. Strategies are being devised to respond to these challenges, including increasing rice production and awaiting approval for the African swine fever vaccine to stabilize pork supply.

Economists like Nicholas Mapa from ING and Makoto Tsuchiya from Oxford Economics noted the supply-side nature of the inflationary pressures, driven by factors like food supply constraints. They don’t foresee significant demand-pull inflation due to expectations of a slowing economy and soft external demand.

Former BSP deputy governor Diwa Guinigundo suggested a cautious approach from the central bank in adjusting its monetary policy stance, given the uncertain economic landscape.

Business News: In Feb, the rate of inflation surged to 3.4 percent