Consumer prices remained steady at 3.0 percent in February due to slower inflation for food items, but economists warned that the uptick will likely accelerate in the coming months on skyrocketing oil prices as war continues to rage in Ukraine.

The Philippine Statistics Authority reported on Friday, March 4, that the country’s headline inflation clocked in at 3.0 percent last month, unchanged from its 14-month low level recorded in the first month of the year.

Likewise, inflation rate was below the median analyst forecast of 3.3 percent, and the 4.2 percent seen in the same month in 2021.

While the latest inflation reading is favorable, this has yet reflected the impact of ongoing geopolitical developments in Europe between neighboring nations Russia and Ukraine.

Allaying fears, Socioeconomic Economic Secretary Karl Kendrick T. Chua said the government is standing ready to help Filipinos from the economic impact of the Russia-Ukraine conflict.

Chua stated that the government will use its available resources to provide targeted subsidies to the affected sectors.

He added that the government will continue its efforts to increase food supply by helping farmers improve their productivity and importing, when necessary, to fill supply gaps.

“Prices of commodities, such as oil, wheat, and corn, are going up as demand outpaces supply. That is why we need to proactively manage the impact on the people through these two measures,” Chua said.

ING Bank Senior Economist Nicholas Antonio T. Mapa, said 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 target as early as second-quarter.

“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 four percent by May,” Mapa said.

The Bangko Sentral ng Pilipinas has an inflation target of 2.0 percent to 4.0 percent this year.

Earlier, the Development Budget Coordination Committee announced that the government will provide P2.5 billion in subsidy for the Fuel Subsidy Program that covers drivers of jeeps, buses, UV express, transport network vehicle services, and tricycles.

In addition, the Department of Agriculture has allotted P500 million to provide assistance through fuel discounts to farmers and fisherfolk who either individually own and operate agricultural and fishery machinery, or operate through a farmers organization or cooperative.

In February, food inflation decreased to 1.1 percent from 1.6 percent in January. This was driven by slower inflation rates for meat, at 1.4 percent from 4.3 percent, and fish, at 2.9 percent from 6.2 percent.

However, corn inflation significantly increased to 31.3 percent from an already elevated 27.7 percent.

On the other hand, non-food inflation increased to 4.1 percent in February from 3.8 percent in January, mostly due to rising oil prices.

Specifically, electricity, gas, and other fuels for household inflation accelerated to 12.8 percent, and private transport inflation increased to 29.8 percent.

In contrast, public transport inflation remained muted at 0.9 percent as fares are regulated.