Inflation flat at 3% in February, says PSA

Inflation or the rate of increase in the prices of goods and services posted a flat reading in February due to varying movements in the prices of commodities, the Philippine Statistics Authority (PSA) reported on Friday.

At a virtual press conference, PSA chief and National Statistician Claire Dennis Mapa said inflation clocked in at 3% last month, the same level posted in January.

February’s inflation print is slower than the 4.2% rate seen in the same month last year.

This brought the year-to-date inflation at 3%, within the government’s target band of 2% to 4%.

Last month’s inflation is also within the Bangko Sentral ng Pilipinas’ forecast range of 2.8% to 3.6%.

Mapa said three commodity groups — housing, water, electricity, gas, and other fuels at 4.8% from 4.5%; transport at 8.8% from 7%; and recreation and culture at 1.6% from 1.5% — saw faster increases.

Meanwhile, slowdowns were observed in the indices of the following commodity groups:

• food and non-alcoholic beverages at 1.2% from 1.7%
• alcoholic beverages and tobacco at 4.7% from 5.6%
• clothing and footwear at 1.9% from 2%
• furnishing, household equipment and routine household maintenance at 2.3% from 2.4%
• health at 2.7% from 3.1%
• information and communication at 0.6% from 0.7%
• restaurants and accommodation services at 2.9% from 3%

The rest of the commodity groups — education services; financial services; personal care and miscellaneous goods and services — retained their previous month’s inflation rates.

Despite the recent uptick in the prices of petroleum products, the February inflation print remained unchanged from January’s as decreases were recorded in vegetables at -8.4% and the fruits and nuts index at -4.9%, according to Mapa.

Likewise, inflation decelerated in meat and other parts of slaughtered land animals to 1.4%; fish and other seafood to 2.9%; and milk, other dairy products, and eggs to 0.7%.

Inflation in NCR

Compared to the flat reading at the national level, inflation in the National Capital Region (NCR) accelerated to 1.9% in February from 1.3% in January.

The uptrend in Metro Manila’s inflation was due to higher increases in the indices of household equipment and routine household maintenance at 2.2%; transport at 7.9%; information and communication at 0.6%; restaurants and accommodation services at 3.7%; and personal care, and miscellaneous goods and services at 1.4%.

In particular, the transport index saw an uptick due to faster increases in diesel at 47.5% inflation from 41.7% and gasoline at 33.4% from 29.9%.

Meanwhile, the index for food and non-alcoholic beverages in the region decreased at a slower rate of -1.6% from -3%.

Slower annual growths were recorded in the indices of alcoholic beverages and tobacco at 4%; housing, water, electricity, gas, and other fuels at 3.6%; and health at 1.4%. 

Inflation outside NCR

Inflation in areas outside NCR, on the other hand, slowed down to 3.4% from 3.5% due to slower increases in food and non-alcoholic beverages (1.7%); alcoholic beverages and tobacco (4.8%); clothing and footwear (2.2%); health (2.9%); information and communication (0.7%); and restaurants and accommodation services (2.7%).

Nine regions in areas outside Metro Manila registered slower inflation during the month, according to the PSA.

Among the regions in areas outside NCR, the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) had the lowest inflation rate of 1.6%, while Region VII (Central Visayas) had the highest inflation at 5.1%.

Inflation for bottom 30%

Inflation felt by the bottom 30% income households also declined to 2.7% from 3.2% due to the slower annual growth rate in the index of food and non-alcoholic beverages at 2.1% during the month, from 3.1% in the previous month.

In a statement, BSP Governor Benjamin Diokno said inflation is seen to accelerate over the near term due to higher oil prices as well as the impact of positive base effects.

“Nonetheless, the BSP’s full-year inflation forecasts continue to show that inflation would settle within the 2 to 4% target range for 2022-2023 as government direct measures help address the supply constraints,” Diokno said.

However, the recent increases in global crude oil prices due to the Russia-Ukraine conflict have raised global and domestic macroeconomic uncertainty over the near term, he said.

“Under these circumstances, the BSP will continue to closely monitor the emerging risks to the outlook for inflation and remain vigilant against possible second-round effects from supply- side pressures or any shifts in inflationary expectations. The BSP supports the implementation of non-monetary measures by the national government to help mitigate the impact of higher oil prices and avoid the broadening of price pressures,” the BSP chief said.

Despite the stable inflation rate, Socioeconomic Planning Secretary Karl Kendrick Chua said that commodity prices are increasing amid the conflict between Russia and Ukraine.

To address this, Chua said that the government will use its available resources to provide targeted subsidies to the affected sectors.

The Cabinet official added that the government will continue its efforts to increase food supply by helping farmers improve their productivity and importing, when necessary, to fill supply gaps.

The Development Budget Coordination Committee affirmed that the government is preparing to release P2.5 billion for the fuel subsidy program that covers drivers of jeeps, buses, UV express, transport network vehicle services, and tricycles.

In addition, the Department of Agriculture has a budget of P500 million to provide assistance through fuel discounts to farmers and fisherfolk who either individually own and operate agricultural and fishery machinery, or operate through a farmers organization or cooperative.

“Prices of commodities, such as oil, wheat, and corn, are going up as demand outpaces supply. That is why we need to proactively manage the impact on the people through these two measures,” Chua said.  —KBK, GMA News