Poll: February inflation may have hit 13-mo high
Consumer prices may have picked up at a faster clip in February, fueled by a quicker rise in the cost of key items such as food and oil, with the gains appearing more pronounced against the backdrop of muted price increases a year earlier.
Inflation—the rate at which the overall price of goods and services rises—is projected to have accelerated to 2.6 percent year-on-year in February, according to the median estimate of 14 economists polled by the Inquirer.
If the forecast holds, the figure to be reported on March 5 would mark a jump from January’s 2-percent pace and the fastest inflation since January 2025, when it stood at 2.9 percent.
Even so, the reading would fall within the range projected by the Bangko Sentral ng Pilipinas (BSP), which estimated last month’s price gains at 2.3 percent to 3.1 percent.
Overall, both the market consensus and the central bank’s estimate suggest that inflation remained within the official target range of 2 percent to 4 percent.
Alvin Arogo, chief economist at the Philippine National Bank, said distortions in the data also contributed to last month’s inflation. The term for this is “base effects,” which in this case means that last year’s low prices are making this year’s increases look stronger than they otherwise would. Inflation in February 2025 stood at 2.1 percent.
Arogo, whose estimate matched the consensus, said base effects alone accounted for about half of the projected 0.6 percentage-point increase.
Aris Dacanay, economist at HSBC Global Investment Research, shared the same view. His projection also matched the consensus.
“Both headline and core inflation in the Philippines are rising,” Dacanay said. “Though this was largely expected due to base effects, the acceleration is turning out to be faster than anticipated.”
Looking ahead, the BSP expects inflation to average 3.6 percent this year and 3.2 percent next year, suggesting that consumer prices are likely to remain stable and on target, with any supply shocks seen as temporary.
That, in turn, could give the central bank enough scope to further lower borrowing costs to support the anemic economy if warranted. The BSP has lowered its key rate to an over three-year low of 4.25 percent, though it acknowledged that its capacity to support an economy weakened by a graft scandal may be reaching its limits.
Jun Neri, lead economist at Bank of the Philippine Islands, said inflation may have bolted to 3 percent last month, driven by “sustained rice and energy pressures” that may offset easing costs of other food items like vegetables.
“If realized, headline inflation could approach or breach 4 percent as early as April, largely contingent on the rice demand-supply dynamics in the coming months, which we continue to monitor closely,” Neri said. “Elevated inflation risk may warrant revisiting our central view of one additional rate cut before year-end.”
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