Philippine inflation slows more than expected in February as rice prices drop
THE Philippines’ annual inflation eased more than expected in February, driven largely by slower increases in food and utility costs, the statistics agency said on Wednesday (Mar 5), likely giving the central bank room to resume cutting interest rates.
The consumer price index (CPI) rose 2.1 per cent in February, coming in below the 2.6 per cent median forecast in a Reuters poll and the previous month’s 2.9 per cent rate.
Last month’s print, which fell closer to the low end of the central bank’s 2 to 4 per cent target, marks the slowest annual increase since September, when inflation stood at 1.9 per cent.
The Philippine central bank unexpectedly kept its key interest rate steady in February after three consecutive 25-basis-point cuts in previous reviews, citing uncertainties over global trade policies, but said it remained on an easing cycle.
“More benign inflation near the lower end of the central bank’s inflation target would support monetary easing, possible 25 basis points rate cut as early as the April meeting,” Michael Ricafort, chief economist at RCBC bank, said.
Core inflation, which excludes volatile food and energy prices, also eased to 2.4 per cent in February, down from 2.6 per cent in January.
Food inflation saw a notable slowdown, easing to 2.6 per cent in February from 4 per cent in January. That was driven by a 4.9 per cent drop in rice inflation, the steepest decline since April 2020, when prices of the national staple fell by 5.7 per cent.
The Philippines, among the world’s largest rice importers, declared a food security emergency last month to bring down the cost of rice, which it said has stayed elevated despite lower global prices and a reduction in rice tariffs in 2024. REUTERS
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