February inflation rose to 4.3 percent
THE year-on-year headline inflation rose to 4.3 percent in February from the January level of 3.6 percent (revised). The year-to-date average of 3.9 percent remained within the Government’s target range of 3-5 percent for 2011, according to the bangko Sentral ng Pilipinas.
Similarly, core inflation—which excludes certain food and energy items to measure generalized price pressures—increased in February to 3.5 percent from 3.3 percent in January. Month-on-month headline inflation was also higher at 1.1 percent from 0.8 percent in the previous month.
Higher inflation in February was traced mainly to the increase in food inflation, particularly for fruits and vegetables due to crop damage from continuous heavy rains during the month, particularly in Mindanao. Fish inflation also went up as the colder weather in February limited the supply of fish in the market. At the same time, inflation for services also accelerated due to increases in the domestic prices of petroleum products, largely influenced by rising imported crude oil prices, and the recent hikes in transport fares.
BSP Officer-in-Charge Juan de Zuñiga, Jr. noted that sustained higher global commodity prices, particularly for food and oil, and their follow-on effects on other prices could pose risks to inflation expectations. He added that future inflation developments will also be dependent on the persistence of commodity price pressures.
The BSP is closely monitoring all risks to future inflation and is prepared to take appropriate monetary policy action to ensure that price stability is safeguarded, he said.