February inflation fastest in more than 2 yrs. – PSA data

 

Prices of consumer goods rose by more than 3 percent in February, the fastest in over two years, on the back of higher increases in food and non-alcoholic beverages.

"At the national level, the headline inflation further accelerated by 3.3 percent in February 2017. It went up by 2.7 percent in the previous month and 0.9 percent in February 2016," the Philippine Statistics Authority said in the Summary Inflation Report.

The statistics office noted the faster annual rate of the heavily-weighted food and non-alcoholic beverages index was primarily responsible for revving up inflation last month. The index advanced by 4.1 percent in February, year-on-year, it said.

The growth was primarily brought about by higher annual rate posted in the as it advanced by 4.1 percent during the month.

Faster yearly increases were also observed in the indices of the following commodity groups:

• Alcoholic Beverages and Tobacco (6.0%)

• Housing, Water, Electricity, Gas and other Fuels (2.9%)

• Transport (2.8%)

• Communication (0.2%)

"Inflation for February tipped at 3.3 percent due to higher annual increases in prices of food and non-alcoholic beverages," Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco, Jr. said in a separate text message to reporters.

This is the first time inflation accelerated by more than 3 percent since it notched 3.7 percent in November 2014, PSA data showed.

"This puts the average for the first two months of the year right at the middle of the Government's target range, and confirms our expectations that the monthly path of inflation will move up, and that the average for the year will be within target," Tetangco said.

The BSP expects inflation to clock in between 2 percent and 4 percent this year.

"As the uptick is in line with forecast, there appears to be no immediate impetus to adjust the stance of monetary policy, but we will remain data dependent in our assessment and forthcoming decisions," Tetangco said.

Price pressures will likely come from petitions for higher utility rates and transportation fare, as well as the tailwind of the Malampaya maintenance shutdown last month, Tetangco noted.

The central bank is also monitoring the near-term impact of the proposed Comprehensive Tax Reform Program and market reactions to the US Federal Reserve and its assessment of the US economy.

"On the downside, we are looking at the growth in the rest of the global economy, which continues to be tentative," Tetangco said. — VDS, GMA News