Barclay’s sees uptick in inflation in Feb

MANILA, Philippines - Inflation likey rose to 2.5 percent in February following the typhoon that hit the country in December, UK-based investment bank Barclays said in a report.

“Inflation to edge higher amid ongoing tight supply of some fresh vegetables following damage to crops from Typhoon Ruby in December,” the bank said in its latest Emerging Markets Weekly report.

But the bank stressed core inflation – without food or oil prices – likely remained at 2.2 percent in February from the previous month.

Typhoon Ruby battered the country in December, killing 18 and injuring 916, the government reported. The weather disturbance also damaged P5.09 billion worth of infrastructure and agriculture, government data showed.

The Bangko Sentral ng Pilipinas last week forecast inflation to have settled within 2.2 percent to three percent in February amid an increase in the cost of power and water and the recent uptick in pump prices.

The central bank, however, said the upside pressures to the rate last month could have been offset by lower prices of rice.

Official February inflation data is due for release on March 5.

Inflation slowed to an 18-month low of 2.4 percent in January on lower utility rates and continuous cuts in pump prices. This is well-within the BSP’s two to four percent target for the rate this year.

During the central bank’s rate-setting meeting in February, BSP Governor Amando M. Tetangco Jr. said risks to inflation this year are “broadly balanced” with upside pressures coming from pending adjustments in utility rates and the possible power shortage during the summer.

The downside risks, meanwhile, stem from the slower-than-estimated global economic outlook.