MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said inflation likely accelerated to 3.2 percent in February after easing to a 15-month low of three percent in January amid the steady rise in oil prices and elevated food prices.
BSP Governor Benjamin Diokno said this is the midpoint of the forecast range of 2.8 to 3.6 percent set by central bank economists.
Diokno said that upside pressures on the consumer price index (CPI) in February include higher fuel prices, as well as the increase in the prices of select meat products and rice.
On the other hand, downside risks include stable peso, lower power rates in areas serviced by Manila Electric Co. (Meralco) as well as cheaper fish and vegetables.
“The series of oil price hikes along with higher prices of rice and meat are the primary sources of inflationary pressures during the month. These could be offset in part by lower electricity rates in Meralco-serviced areas and the observed decrease in prices of fish and vegetables due to easing supply constraints,” the BSP chief said.
The prices of oil as well as some food products such as wheat are expected to increase further as Russia started the invasion of Ukraine.
Looking ahead, Diokno said the BSP would continue to monitor emerging price developments and possible second-round effects to help achieve its primary mandate of price stability that is conducive to balanced and sustainable economic growth.
Last Feb. 17, the central bank’s Monetary Board raised its inflation forecasts to 3.7 instead of 3.4 percent for this year and to 3.3 instead of 3.2 percent for 2023.
BSP managing director Zeno Ronald Abenoja earlier said that the upward revisions were due to higher global crude oil prices as well as non-oil prices that could affect domestic inflation.
Abenoja said global oil prices are now expected to average $83 per barrel or $10 higher than the $73 per barrel used in setting the forecast last December.
According to Abenoja, authorities expect global oil prices to ease going forward on expectations of higher supply.
However, the global prices of oil breached $100 per barrel after Russia launched its attack on Ukraine.
On the inflation path, Abenoja explained that the CPI is seen accelerating above the two to four percent target in the second quarter before easing back to within the range in the second half of the second quarter this year until next year.