Inflation seen at 3.4%-4.5% in February

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) sees inflation averaging  between 3.4 percent and 4.5 percent this month despite the uptick in the prices of basic commodities such as rice, sugar, and bread brought about by reduced supply caused by the El Niño weather conditions.

BSP officer-in-charge Armando Suratos said in a text message to reporters that the inflation forecast for February takes into consideration the hike in prices of several food   items particularly rice, sugar and bread.

“BSP inflation forecast for February takes into account possible inflationary pressures  emanating from the price increases of several food items such as rice, sugar, and bread,” Suratos stressed.

He pointed out that the price of rice went up this month due to reduced supply as harvests  taperred off and also due to concerns over expected lower palay output due to El Niño  while prices of sugar and bread likewise increased due to higher sugar prices in the world  market.

The BSP deputy governor also noted the rise in utility rates particularly power rates this  month.

Utility giant Manila Electric Co. (Meralco) announced early this month that it was  increasing its generation charge for the month of February to P4.903 per kilowatt-hour from P3.9174 per kwh last January.

Customers consuming 100 kwh per month would have to pay an additional P57.34 in  their monthly bill while those consuming an average 200 kwh would have to shell out  P159.4 and those using 300 kwh would have to pay an additional P241.92.

However, Suratos said the reduction in the prices of fish, chicken, and vegetable this   month due to the normalization of supply after tropical storm Ondoy and typhoon Pepeng would help temper the rise in consumer prices.

“Meanwhile, the decline in the prices of fish, chicken, and vegetable as supply improved  could temper the increase in the overall price level,” he added.

Inflation eased for the first time in five months, slowing down to 4.3 percent in January  from an eight month high of 4.4 percent in December due to lower food prices. Actual inflation was lower than the central bank forecast of between 4.5 percent and 5.4 percent for January.