Fuel, utilities prices stoke February inflation to 2.5%

The uptick in petroleum prices and higher utility rates were offset by the slow increase in food prices," the the National Economic and Development Authority (NEDA) said in a separate statement. 

 

NEDA director general and Economic Planning Secretary Arsenio M. Balisacan attributed the moderate rise in inflation to the supply chain and a relatively stable peso in the first two months of the year.

 

“There were no new major economic shocks such as adverse weather conditions. The supply chain also normalized, partly due to the easing of port congestion. The peso likewise remained relatively stable due to the country’s strong external position,” he said.

NEDA said the increase in oil prices during the month were still significantly lower than in the second half of 2014. 

 

"The recent increase in oil prices was the result of cutbacks in the production and exploration of international energy firms triggered by soft oil prices," Balisacan said.

 

"Outlook for prices in the medium term, however, remains modest given a backdrop of strong world crude oil supply growth and weak global demand," he noted.

NEDA said the increase in transport services to 3.3 percent in February from 1.5 percent in January came after the fare increase for MRT and LRT were enforced, citing this development was observed in the National Capital Region.

 

On the other hand, food prices continued to drop in February, from 5.6 percent to 4.9 percent, reflecting softer upward adjustments in the indices of rice, meat, and vegetables.

 

The favorable outlook on the production of agricultural commodities, particularly palay and corn, should help ease some more the price pressures in the coming months, Balisacan noted.

 

However, the lingering possibility of El Niño in the first quarter of 2015 poses inflationary risks in the immediate term, the Cabinet secretary noted.

 

"Programs to increase productivity and ensure the sufficiency in the supply of key commodities are needed. Likewise important is addressing the looming power woes and creating better logistics supply chains to reduce production and transport costs," Balisacan said.