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Philippine Feb inflation to heat up to 27-month high: poll

Monday, March 6, 2017 - 13:14

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Consumer inflation in the Philippines likely quickened to the highest in 27 months in February, mainly due to increases in energy prices and transport fares, but is unlikely to prompt any rate increases from the central bank, a Reuters poll showed.

[MANILA] Consumer inflation in the Philippines likely quickened to the highest in 27 months in February, mainly due to increases in energy prices and transport fares, but is unlikely to prompt any rate increases from the central bank, a Reuters poll showed.

The median forecast in a poll of 11 economists was for the consumer price index to have risen 3.3 per cent last month from a year earlier, faster than the January reading of 2.7 per cent.

A weaker Philippine peso, which drives up the costs of imports including oil, could keep inflation in the 3-4 per cent range in coming months, some economists said.

The peso hit a more than 10-year low versus the US dollar on Friday after a series of comments from US Federal Reserve officials last week increased expectations for a Fed rate hike this month.

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A 3.3 per cent annual rate would be the highest inflation since November 2014 when it hit 3.7 per cent, but it would remain within the central bank's 2-4 per cent target for this year.

The Philippine central bank has not tinkered with interest rates since it raised the benchmark rate by 25 basis points in September 2014. It meets next to review policy on March 23.

Some economists said a rate hike by the Fed this month could prompt the Philippine central bank to kick-off its own policy tightening, but others believe it can afford to keep the key rate unchanged through 2017.

Early on Monday, Bangko Sentral ng Pilipinas Governor Amando Tetangco said there may be no need for the central bank to adjust policy at the moment as financial markets seem to have already priced in a Fed hike this month.

REUTERS

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