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Keisha Ta-Asan - The Philippine Star
March 3, 2025 | 12:00am
Inflation eased to a four-year low in September due to the slower increase in food prices.
MANILA, Philippines — Headline inflation likely eased in February from 2.9 percent in January as rice and fuel prices declined, offsetting price pressures from other food items, economists said.
Aris Dacanay, economist for ASEAN at HSBC, said lower rice prices and favorable base effects are the main drivers of the expected slowdown in inflation, which is expected to hit 2.6 percent in February.
“Not only were there favorable base effects on rice, but rice prices fell on a month-on-month basis,” Dacanay said. The decline in retail fuel prices, amid falling global oil prices, also contributed to the easing of inflationary pressures.
However, the HSBC economist noted that certain food items experienced significant price increases. Prices of cabbages, bitter melons, onions and eggplants surged between 30 and 50 percent year-on-year due to tight supply conditions stemming from past typhoons.
“Looking ahead, we expect risks to inflation to be tilted to the downside with room for rice prices to decline even further, more so with the government directly boosting supply in the market,” Dacanay added.
BPI lead economist Jun Neri also projected a 2.6 percent inflation for February, citing lower rice and vegetable prices as mitigating factors against rising gas (LPG and kerosene) and utility costs.
Meanwhile, UnionBank chief economist Ruben Carlo Asuncion forecast a slightly higher inflation of 2.8 percent, attributing it to rising meat, fish, fruit and vegetable prices based on an initial Philippine Statistics Authority (PSA) survey.
However, Asuncion noted that softer gasoline and diesel prices, a weaker dollar against the peso as well as easing electricity and rice prices could help offset broader food price increases.
“If inflation expectations continue to be subdued and anchored—there will be another inflation data point before the Monetary Board’s next meeting on April—we think that the MB has room to trim the policy rate to support economic growth,” he said.
Nalin Chutchotitham, economist for the Philippines at Citi, likewise projects February inflation at 2.8 percent as higher electricity costs could offset the decline in crude oil prices.
The PSA is set to release the February inflation data on March 5.
