Consumer prices accelerated the fastest in five months last February, fueled by higher costs of food and beverage , the National Statistics Office (NSO) reported Tuesday.
Headline inflation quickened to 3.4 percent from 3 percent in January. The figure is the highest since prices quickened by 3.6 percent in September, but remains well-within the Bangko Sentral ng Pilipinas projection of 2.8 percent to 3.7 percent for February.
Month-on-month core inflation—without the volatile food and energy prices—hit 3.8 percent from 3.6 percent, the NSO noted.
The February figure pushed the year-to-date headline inflation to 3.2 percent, still at the lower-end of Bangko Sentral's 3 to 5 percent range projection for 2013 but slightly above its 3 percent forecast for the year.
“This reflects that inflation remains manageable,” Bangko Sentral Governor Amando Tetangco Jr. said in a text message to reporters on Tuesday.
Monetary authorities are watchful of any upside risk to inflation, “any petitions for utility rates and wages on the domestic front, as well as any shifts in global economic growth dynamics that could impact international commodity prices,” Tetangco said.
The Bangko Sentral chief, likewise, said monetary authorities will tweak policy settings “as appropriate.”
In January, monetary authorities rationalized rates of the Bangko Sentral Special Deposit Accounts(SDA)—previously priced at a premium to policy rates—to 3 percent.
They kept policy rates on hold at record lows of 3.5 percent for overnight borrowing and 5.5 percent for overnight lending. Tetangco has not ruled out further cuts in SDA rates.
But British banking giant Barclays does not see a need to tweak policy anytime soon.
“We believe the impact of a further SDA rate cut on speculative flows would be relatively limited,” the bank said in an e-mailed report, noting that the Bangko Sentral prohibited non-residents in investing in SDAs.
Citing robust growth expectations luring in capital inflows and stoking inflation, Barclays said, “We continue to expect headline inflation to average 4.1 percent in 2013.”
Thus, Barclays sees monetary authorities hiking policy rates by 25 basis points in the fourth quarter to cushion inflationary pressures. — VS, GMA News