(Updates with comments from Barclays Bank analyst)
Headline inflation picked up pace to 2.5 percent in February from 2.4 percent in January, but decelerated from 4.1 percent recorded a year earlier, official data showed on Thursday.
The February figure released by the Philippine Statistics Authority (PSA) came within the central bank’s forecast range of between 2.2 percent and 3 percent for the month, as well as private analysts’ estimates of between 2.4 percent and 2.7 percent.
The PSA noted mixed price movements among the commodity groups during the month.
“While negative annual rates were still observed in the housing, water, electricity, gas and other fuels and transport indices, these rates were lesser compared with those in January,” it said in a statement.
The PSA added that slower rates were seen in the indices of food and non-alcoholic beverages; alcoholic beverages and tobacco; clothing and footwear; furnishing, household equipment and routine maintenance of the house; and restaurant and miscellaneous goods and services.
The rest of the commodity groups kept the previous month’s growth pace while the communications index slowed, it said.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said the February rate of 2.5 percent puts the year-to-date average at 2.4 percent.
In a text message to reporters, Tetangco stressed that inflation over the policy horizon is seen remaining manageable.
“While we see the stance of policy still appropriate at this time, we continue to watch global developments, including possible strong reversals in oil price trends and changes in investor sentiment, which could create market volatility and affect inflation expectations,” he said.
The government has set an inflation target of between 2 percent and 4 percent for this year until 2018.
UK-based investment bank Barclays said that given the February inflation data, it expects inflation for the entire year to stay broadly within the BSP’s target range, “with lower energy prices and easing rice inflation partly mitigated by sticky core inflation.”
Core inflation, which excludes select food and energy items, inched up to 2.5 percent in February from 2.2 percent in January but slowed from 3 percent posted in the corresponding period last year.
“The BSP appears comfortable with its current policy stance, as although low inflation is leaving room to keep policy on hold, growth remains robust,” Barclays said in its Emerging Markets Research note.
The bank noted that congestion at the Manila Port, which began in February 2014, has now been cleared, removing a key obstacle to export growth.
Consumer prices in Metro Manila rose 2.2 percent in February from 1.5 percent in the preceding month but slowed from 2.8 percent a year earlier.
In areas outside Metro Manila, February inflation slowed to 2.6 percent from 2.7 percent in January and 4.5 percent in the same period a year ago.
MAYVELIN U. CARABALLO