THE rise in commodity prices could be higher in February due to more expensive food items, according to the Bangko Sentral ng Pilipinas (BSP).
On Thursday, BSP said inflation could average 2.8 to 3.6 percent in February due to more expensive food items such as rice, meat, and fish.
The BSP also said the increase in petroleum prices and electricity rates were also primary sources of upward price pressures in February.
“Going forward, the BSP will continue to monitor developments affecting the outlook for inflation and growth in line with its data-dependent approach to monetary policy decision-making,” BSP said.
In January, inflation averaged 2.8 percent. However, rice prices averaged 22.6 percent, the highest in 15 years. (See: https://businessmirror.com.ph/2024/02/06/rice-inflation-highest-since-2009-psa-data/).
Data from the Philippine Statistics Authority (PSA) also showed meat and Other Parts of Slaughtered Land Animals posted a deflation of 0.7 percent; while fish and Other Seafood posted an inflation of 1.2 percent.
However, this estimate is still within the 2 to 4 percent target of the BSP. This is largely due to the slowdown in the increase in key commodities.
“The lower prices of vegetables, fruits, and sugar could contribute to downward price pressures,” BSP said.
PSA data showed vegetables, Tubers, Cooking Bananas and Pulses posted a deflation of 20.8 percent and sugar, Confectionery and Desserts, 1 percent in January 2024.
The data, however, showed Fruits and Nuts posted an inflation of 10 percent in January 2024.
In February, the Monetary Board, the highest policymaking body of the BSP, has left the Target Reverse Repurchase (RRP) Rate unchanged for the second time in a row.
With the decision, the country’s key policy rate was maintained at 6.5 percent. The interest rates on the overnight deposit and lending facilities were kept at 6 percent and 7 percent, respectively.
BSP Monetary and Economic Sector In-Charge Iluminada Sicat said the monetary authorities would rather take a “more prudent monetary policy stance” given upside risks to inflation.
The latest inflation outlook of the BSP, the baseline forecast for inflation is at 3.6 percent in 2024 and 3.2 percent in 2025. The new baseline forecast for 2024 was lower than the 3.7 percent made in November 2023 while the forecast for 2025 was maintained.
The risk-adjusted forecast for 2024, meanwhile, was at 3.9 percent for 2024, lower than the 4.4 percent estimate in November 2023; and for 2025, it is at 3.5 percent, higher than the 3.4-percent projection last year.
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