Headline inflation eased slightly to 4.1 percent year-on-year in February from 4.2 percent in January, and was within the BSP’s forecast range of 3.8-4.6 percent for the month. This brought the year-to-date average inflation rate to 4.2 percent, within the Government’s inflation target range of 4.0 percent ± 1.0 percentage point for 2014. Similarly, core inflation—which excludes certain food and energy items to better capture generalized price pressures—slowed down to 3.0 percent in February from 3.2 percent in the previous month. On a month-on-month basis, seasonally-adjusted consumer price index was unchanged after rising by 0.6 percent in January.
The slightly lower February headline inflation reading was due largely to the slower increases in the prices of alcoholic beverages and tobacco products, and transport. Non-food inflation held steady as the slowdown in the inflation rate for transport was counterbalanced by the increases in the inflation rate recorded for other non-food items. By contrast, food inflation accelerated further as the higher prices of rice, meat, milk, and oils more than offset the slower price increases for corn, fish, and vegetables.
Governor Amando M. Tetangco, Jr. said that the actual inflation outturn in February continues to support the BSP’s assessment of a manageable inflation environment over the policy horizon. Going forward, the BSP will continue to keep a close watch on the balance of risks to the inflation outlook over the policy horizon and make adjustments to the stance of policy as warranted.