BSP Says That Inflation Can Breach 9% In February

According to the Bangko Sentral ng Pilipinas (BSP), headline inflation can breach the 9% level in February in light of increased prices of eggs, fish, pork, and cooking gas.

BSP released a statement saying that inflation in February will be around the range of 8.5% to 9.3%. This range would come after January’s 8.7% rate, which has been noted to be the fastest since November 2008.

Once realized, February would be the 11th consecutive month that inflation would breach the target rate of 2 – 4% of the BSP.

The 9.3% prediction would be noted as the fastest pace in more than 14 years or since October 2008’s figure of 9.7%.

“Upward price pressures for the month are expected to emanate from higher LPG (liquefied petroleum gas) prices as well as elevated prices of key food items, such as pork, fish, egg, and sugar,” said BSP.

In February, cooking gas prices went up by ₱10 – ₱11.20 per kilogram. On the other hand, egg prices increased to ₱8 – ₱9 per piece compared to ₱6 a year ago.

Refined sugar prices went up as much as ₱110 per kilogram in February, which is almost twice as compared to ₱65 per kilogram from a year prior.

“Meanwhile, the lower prices for domestic petroleum, fruits and vegetables, chicken, and beef, along with the peso appreciation could contribute to easing price pressures during the month,”  said the BSP.

The elevated inflation will add pressure on the BSP to maintain its aggressive monetary tightening.

“We cannot rule out (rate) increases. Exactly how many, we don’t know. We need more data,”  stated BSP Governor Felipe M. Medalla.

Source: Business World