MEDYO GOOD NEWS: PH Inflation Rate Eases to 8.6% for Feb 2023

• The headline inflation rate in the Philippines for February 2023 eased to 8.6%, lower than January’s 8.7%, according to the Philippine Statistics Authority.
• Transport was the only commodity group that drove the downtrend of overall inflation in February, while food and non-alcoholic beverages, alcoholic beverages and tobacco, clothing and footwear, furnishings, household equipment and routine household maintenance, health, recreation, sport and culture, restaurants and accommodation services, and personal care and miscellaneous goods and services experienced higher inflation rates.
• The Monetary Board of the Bangko Sentral ng Pilipinas is considering a 25 basis point increase in the BSP’s key rates later this month because the inflation rate for February 2023 did not reach 9.0%, according to reports.

The headline inflation rate in the Philippines has finally eased to 8.6 percent in February 2023, lower than January 2023’s 8.7%, the Philippine Statistics Authority (PSA) reported yesterday. This makes the average inflation rate for the first two months of the year stand at 8.6%.

“Among the 13 commodity groups, transport was the sole driver of the downtrend of the overall inflation during the month, recording a 9.0 percent inflation rate in February 2023 from 11.1 percent inflation in January 2023,” the report emphasized. 

However, despite the ease, the PSA noted that the following sectors experienced a higher inflation rate for February:

• Food and non-alcoholic beverages, 10.8%
• Alcoholic beverages and tobacco, 11.0%        
• Clothing and footwear, 4.8%
• Furnishings, household equipment and routine household maintenance, 6.2%
• Health, 4.0%
• Information and communication, 0.8%
• Recreation, sport and culture, 4.4%
• Restaurants and accommodation services, 8.1%
• Personal care, and miscellaneous goods and services, 5.3%

While the indices for housing, water, electricity, gas, and other fuels; and education services moved at their previous month’s annual rates of 8.6% and 3.6%, respectively. The financial services index continued to record a 0% annual rate.

Meanwhile, the PSA also highlighted that ‌food inflation at the national level slowed down to 11.1% in February 2023 from 11.2% in January 2023:

“The downtrend in the food inflation was mainly brought about by the lower year-on-year growth in the index of vegetables, tubers, plantains, cooking bananas and pulses at 33.1 percent in February 2023, from 37.8 percent in January 2023. In addition, the rice index increased at a lower rate of 2.2 percent during the month, from 2.7 percent in January 2023.”

The indices for the following food groups for February 2023:

• Corn, 12.6% (decreased)
• Meat and other parts of slaughtered land animals, 6.5% (decreased)
• Oils and fats, 17.3% (decreased)
• Sugar, confectionery and desserts, 37.0% (decreased)
• Flour, bread and other bakery products, pasta products, and other cereals, 11.7% (increased)
• Fish and other seafood, 9.9% (increased)
• Milk, other dairy products and eggs, 13.1% (increased)
• Fruits and nuts, 11.5% (increased)
• Ready-made food and other food products not elsewhere classified, 9.8% (increased)

Note: Increased, decreased, or did not change compared to December 2022’s inflation rate for each food group.

For the National Capital Region, ‌inflation increased further to 8.7% from 8.6% in January 2023. While for areas outside the nation’s capital, the inflation rate decreased to 8.5% from January 2023’s 8.7%.

Earlier this year, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla emphasized that the country’s inflation is expected to be below 4% by the second half of the year and below 2% by early 2024 because month-on-month inflation is going down.

BSP: Expect Inflation Rate to 2% by Early 2024

The Monetary Board of the BSP, the ‌agency responsible for making policy decisions related to the management, operation, and administration of the Central Bank, held its meeting on February 16, 2023. 

Though the details of the meeting were not yet publicized, a report by the Philippine News Agency hinted that economists are considering a 25 basis point increase in the BSP’s key rates later this month because the inflation rate for February 2023 did not reach 9.0%. In a separate statement, Medalla earlier stressed that there was the possibility of a 50 basis point hike should inflation reach 9% for that month.

This article is published on BitPinas: MEDYO GOOD NEWS: PH Inflation Rate Eases to 8.6% for Feb 2023

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