Philippines: Inflation weakens in February
Consumer prices fell 0.16% over the prior month in February, contrasting January’s 0.57% increase and marking the first dip in month-on-month prices in over a year. The decline was led by a sharp drop in prices for food and non-alcoholic beverages and transport. That said, a steep rise in the prices of alcoholic beverages and tobacco, due to the recent excise tax hike, offset the dip in the index.
Inflation eased to 2.6% in February from 2.9% in January, but remained within the Central Bank’s target band of 2.0%–4.0%. Core inflation, which excludes volatile food and energy prices, inched down to 3.2% in February from 3.3% in January. Meanwhile, annual average inflation fell to 2.3% from 2.4%.
This year, inflation should fluctuate around current levels, supported by stronger economic activity, the pass-through from the Bank’s monetary policy easing, and the implementation of several new excise taxes. That said, depressed oil prices so far in H1 could keep price pressures more tepid than previously expected.