Philippine Inflation Quickens Further as Food Costs Soar – BNN Bloomberg

Philippine Inflation Quickens Further as Food Costs Soar – BNN Bloomberg

(Bloomberg) — Inflation in the Philippines continues to gather pace even as the economy struggles to pull itself out of recession.

Consumer prices rose 4.7% in February from a year earlier, the statistics agency reported Friday. That’s the fastest pace since December 2018, according to data compiled by Bloomberg, and matched the median forecast in a survey of 21 analysts.

Higher prices of food and beverages, particularly meat, drove the increase, national statistician Claire Dennis Mapa said in a live-streamed briefing.

Faster consumer-price gains are entrenching the nation’s real interest rate in negative territory. However, central bank Governor Benjamin Diokno, who has said the benchmark interest rate will remain unchanged in coming months, reiterated Thursday that quicker price gains don’t require monetary action yet.

Policy makers see inflation remaining elevated in the first half of the year, but say it should taper off by the second half and come in at the top end of the bank’s 2%-4% target range for 2021.

Bangko Sentral ng Pilipinas kept its key rate steady at 2% last month to support an economy that has been among the hardest hit in the region by the pandemic, and the slowest to begin recovering. MUFG Bank Ltd. analysts led by Derek Halpenny wrote that any unwinding of accommodative steps the central bank took in the pandemic may first aim at normalizing liquidity levels rather than raising the benchmark rate.

Policy makers next meet on rates March 25.

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Published at Fri, 05 Mar 2021 01:48:18 +0000