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Philippines Inflation February 2022

Philippines: Inflation stable in February

Consumer prices increased 0.27% over the previous month in February, coming in below January’s 0.36% increase, amid softer price pressures for food.

Year-on-year inflation was stable in February at 3.0%.

Meanwhile, the trend was lower, with annual average inflation coming in at 3.9% in February (January: 4.0%). Finally, core inflation rose to 3.1% in February from January’s 2.9%.

Analysts at the EIU note the role played by the rebasing of the CPI in January on the stable inflation figure:

“The reason for a seemingly stable inflation lies in the slower price growth of the other major category [in addition to housing, utilities and transport], food. In February food prices served as the main inflationary brake, growing at a slower pace of 1.2%, compared with 1.7% in January. However, this can be misleading as the rebasing of the CPI reference year to 2018 means an unusually high base for rice prices.”

Meanwhile, our panelists are in wide agreement that the effect of higher energy prices—provoked by Russia’s invasion of Ukraine—will lead to upward pressure on prices ahead.

ING’s Nicolas Mapa sees inflation as busting the Central Bank’s 4.0% upper range of its target in the near future:

“Given the ongoing conflict in Eastern Europe, more expensive global wheat and energy prices will likely filter through to domestic prices, pushing inflation past the BSP target as early as Q2. Food and transport are the two largest components of the Philippine CPI basket and any sharp price swings for these sectors should be enough to nudge heading inflation past 4.0% by May.”

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