The Bangko Sentral ng Pilipinas said inflation in February likely slowed to as low as 2.4 percent from 2.9 percent in January due to lower power, fuel and rice prices during the month.
The BSP’s Department of Economic Research saw the February inflation settling 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. Looking ahead, the BSP 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,” it said.
Inflation in 2019 stood at 2.5 percent, lower than the midpoint of the target range of 2 percent to 4 percent for the year due to the stabilization of food prices. Inflation stood at 2.5 percent in December, significantly slower than 5.1 percent a year ago.
The manageable inflation environment compelled the BSP to cut the policy rate by 25 basis points to 3.75 percent during the Feb. 6 Monetary Board meeting.
BSP Governor Benjamin Diokno said latest baseline forecasts indicated a broadly steady path of inflation for 2020 and 2021, with the average remaining within the target range of 2-4 percent.
He said upside risks to inflation over the near term could emanated mainly from potential upward pressures on food prices, owing in part to the African swine fever outbreak and tighter international supply of rice.
The board revised slightly upward the inflation forecast this year to an average of 3 percent from the previous estimate of 2.9 percent in the Dec. 12, 2019 meeting.
But the inflation forecast for 2021 was kept steady at 2.9 percent.