Inflation could drop to as low as 0.9 percent this month or accelerate to 1.7 percent, the Bangko Sentral ng Pilipinas (BSP) chief said on Friday, with subdued rice, gasoline and cooking gas prices plus lower jeepney fares offsetting higher prices of electricity, diesel and kerosene.
“February inflation could settle within the 0.9 percent to 1.7 percent range,” central bank Governor Amando Tetangco Jr. said in a text message to reporters.
Inflation moderated to 1.3 percent in January after two consecutive months of increases. Data for February is scheduled to be released by the Philippine Statistics Authority on March 4.
Tetangco said the fall in rice, gasoline and liquefied petroleum gas (LPG) prices and a provisional rollback in jeepney fares in certain regions were seen to dampen inflation pressures for the month.
Earlier this month, Petron Corp. declared a P37.40 reduction in the price of its 11-kilogram
LPG tank, while Eastern Petroleum Corp. slashed its price to P36.96 per tank.
Oil companies such as Pilipinas Shell, PTT Philippines, and Eastern Petroleum Corp. , meanwhile, announced a roll back in gasoline prices in the middle of the month.
The Land Transportation Franchising and Regulatory Board also approved a 50-centavo jeepney fare cut amid plunging fuel prices. The adjustment took effect on January 22, bringing the minimum jeepney fare to P7 from P7.50.
“However, higher power rates and domestic prices of diesel and kerosene could exert upside pressure to inflation in February,” Tetangco said.
Manila Electric Co. (Meralco) increased electricity rates by 42 centavos per kilowatt-hour this month because of higher generation charges.
Last week, Shell, Phoenix Petroleum Philippines, PTT, Eastern Petroleum, and Flying V announced P1.30 per liter hike in the prices of diesel and kerosene.
The central bank’s February forecast is well below the 2 percent to 4 percent target for the year. It has said that headline inflation could average 2.2 percent this year before inching up to 3.2 percent in 2017.
“This February inflation forecast supports within-target inflation outlook over policy horizon. BSP will continue to monitor price trends and take necessary measures towards its commitment of price stability,” Tetangco said.