Inflation could hit 3.2% in February – BSP

Published February 28, 2020, 12:00 AM

by manilabulletin_admin

By LEE C. CHIPONGIAN

The Bangko Sentral ng Pilipinas (BSP) forecasts an inflation high of 3.2 percent for the month of February from 2.9 percent in January.

But, with subdued oil prices in recent weeks, the BSP also expects a low of 2.4 percent for the month which was closer to December’s 2.5 percent.

In a statement Friday, the BSP Department of Economic Research said “inflation (in February is seen) to settle within the 2.4 percent to 3.2 percent range. Lower prices of petroleum products, electricity, and rice as well as other food products are expected to temper price pressures in February.”

The DER said it “will remain watchful of economic and financial developments to ensure that its primary mandate of price stability conducive to balanced and sustainable economic growth is achieved.”

In a separate commentary, chief economist at Security Bank Corp. Robert Dan Reyes forecasts three percent for February inflation, the middle ground for a 2.9 percent to 3.1 percent projected band.

“Cost-push effects from Taal’s eruption appear to be minute, as agricultural activity was quick to recover. Fuel prices have also declined year-on-year, in tandem with electricity rates,” said Reyes.

In the meantime, he said that food prices will likely continue to apply inflationary pressure. “Near-term upside risks to inflation include cost-push pressure from rice as Vietnam’s rice export prices climb on strong demand, while Thailand is poised to reduce exports due to a drought,” added Reyes.

 
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