The central bank estimates headline inflation in February will reflect upward pressures from higher utility rates and an uptick in oil costs being mitigated by lower rice prices.
February inflation will stay within the 2.2 percent to 3 percent range, the Bangko Sentral ng Pilipinas (BSP) said. Official data on inflation for the month is due for release by the Philippine Statistics Authority on March 5.
In January, the consumer price-based indicator recorded its slowest pace in 17 months at 2.4 percent, down from 2.7 percent in December.
The “higher cost of power and water, as well as the recent recovery in oil prices, imply some upward inflation pressures,” BSP Governor Amando Tetangco Jr. said in a text message to reporters on Wednesday.
The electricity rates of Manila Electric Co. (Meralco) rose P0.84 per kilowatt-hour (kWh) this month on higher generation charges and the added cost of renewable energy (RE) produced under the Feed-In-Tariff (FIT) scheme.
Water utility concessionaires Manila Water and Maynilad said consumers should also expect to see higher water bills for February.
Domestic oil players have likewise implemented price hikes of up to 85 centavos for fuel products in line with the apparent bottoming-out and mild recovery of crude prices on the international market.
“However, these [price increases]could be partly offset by lower rice prices,” Tetangco said.
Earlier this month, the National Food Authority (NFA) Council approved the importation of 500,000 metric tons (MT) of rice this year to boost government buffer stocks before the lean season.
“Going forward, the BSP will continue to monitor developments here and abroad that could affect inflation in line with the BSP’s mandate of delivering price stability conducive to balanced and sustained economic growth,” Tetangco added.
At its monetary policy meeting on February 12, the Monetary Board decided to cut the central bank’s inflation forecast for full-year 2015 to 2.3 percent from the previous forecast of 3 percent. For 2016, the forecast was also trimmed to 2.5 percent from 2.6 percent.