ASEAN KEY DESTINATIONS
Fuel, utilities prices stoke February inflation to 2.5%
Inflation quickened a bit in February from a month earlier as fuel prices and household utility rates went up, the Philippine Statistics Authority (PSA) reported on Thursday.
Consumer prices accelerated to 2.5 percent, compared with 2.4 percent in January, but were much slower from 4.1 percent a year earlier, PSA data showed.
While prices moved a bit faster last month, the February inflation rate was within the Bangko Sentral ng Pilipinas' forecast of 2.2 percent to 3 percent.
It is also within the full-year inflation target of 2 to 4 percent this year set by the Development Budget Coordinating Committee (DBCC).
In a phone interview, Bank of the Philippine Islands economist Nicholas Mapa said the latest inflation data reflects the earlier projections of analysts and economists.
"It's fairly within expectation on the back of slow increases in prices of oil, transport," he said.
The PSA said there were mixed year-on-year movements among commodity groups during the month.
"While negative annual rates were still observed in the housing, water, electricity, gas and other fuels and transport indices, these rates were lesser compared to those in January," it said.
Still quite slow
Last month, the Manila Electric Company increased electricity rates by P0.84 per kilowatt hour citing higher charges and the added cost of renewable energy under the Feed-In Tariff scheme.
Also, Philippine oil companies have raised pump prices during the month, reflecting the rebound in crude in the international market.
A water rate increase by Maynilad Water Services Inc. remains unenforced even after the International Appeals Panel upheld a 9.8-percent increase in the 2013 average basic water rates.
While the underlying trend in inflation shows acceleration, Mapa noted the pace of consumer prices is still quite slow.
"Maybe we've seen the bottom in January, but the latest numbers are still very far from the upper end of the target," he said.
"With comments by BSP as neutral – but more on the hawkish side – market has factored this in," he added.
Last month, BSP Deputy Governor Diwa Guinigundo said the central bank can afford to leave interest rates unchanged for some time with inflation expected to settle within target for this year and next.
In its February 12 meeting, the policy-setting Monetary Board kept the rates steady. Policy rates were last tweaked by 25 basis points in October 2014.
Inflation dropped to a 17-month low in January as oil, transport and utilities prices went down, the Philippine Statistics Authority (PSA) reported early last month. – VS, GMA News
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