Inflation rate decelerated to 2.6 percent in February from 2.9 percent in January and 3.8 percent a year ago, pulled down by slower increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said Thursday.
This brought the average inflation in the first two months to 2.75 percent, below the midpoint of the target range of 2 percent to 4 percent.
“The downtrend in the inflation was mainly brought about by the slower annual increase in the heavily-weighted food and non-alcoholic beverages index at 2.1 percent during the month,” the PSA said.
“In addition, annual increments decelerated in the indices of alcoholic beverages and tobacco at 18.2 percent; housing, water, electricity, gas, and other fuels, 1.7 percent; and transport, 1.8 percent,” it said.
The Bangko Sentral ng Pilipinas said the February figure was within its forecast range of 2.4 percent to 3.2 percent.
“The latest inflation outturn is consistent with the BSP’s prevailing assessment that inflation is expected to steadily approach the midpoint of the target range in 2020 and 2021,” the BSP said.
“The risks to the inflation outlook are expected to be weighted to the upside for 2020, but are seen as tilted toward the downside in 2021. Adjustments in utility rates, petitions for transport fare hikes, and the impact of African Swine Fever on meat prices are the main upside risks to inflation,” it said.
The Bangko Sentral said the on-going spread of coronavirus disease 2019 could have an adverse impact on domestic economic activity and financial market sentiment in the coming months.
“The BSP will consider all the latest developments in the Monetary Board’s monetary policy meeting on March 19, 2020. The BSP will ensure that the monetary stance remains consistent with its primary objective of maintaining price stability that is conducive to balanced and sustainable growth of the economy,” it said.
The National Economic and Development Authority said the government should remain vigilant and well-positioned against possible risks to inflation.
“While inflation is expected to remain well within the target for this year, government must not be complacent and ensure that strategies are well-positioned against risks brought by continuous spread of African Swine Fever, tighter rice supply from Thailand and the on-going outbreak of coronavirus disease 2019,” said Economic Planning Secretary Ernesto Pernia.
“We call on our colleagues in the government, both in the national and local levels, to stand ready in effectively managing the demand and supply of key agricultural commodities which will possibly be affected by these risks,” he said.
Pernia highlighted the recently reported oversupply of vegetables and possible delayed arrival of imported products due to production and logistics disruptions in view of the COVID-19 outbreak. He said that providing post-harvest facilities such as cold storage and other logistics support would be necessary to assist the affected producers and consumers.
He also noted the need to strictly implement the national zoning and movement plan and the 1-7-10 protocol to prevent and control the spread of ASF to other localities.
The 1-7-10 protocol requires that all hogs within one-kilometer radius from the ASF-affected area are to be culled. Within the seven-kilometer radius, there will be controlling of movement, shipment, and sale of hogs. Within the 10-kilometer radius, all hogs will be placed under monitoring.