MIDEAST VARIABLES SIGNAL INFLATION RISKS BUILD-UP

FEB CPI UPTICK TO 2.4% WITHIN FORECAST RANGE; ANALYSTS WARN:

- BY RUELLE CASTRO

HEADLINE inflation accelerated to 2.4 percent in February, staying within the central bank's expected range as driven by higher food and fuel costs, but analysts see the recent eruption of fresh hostilities in the Middle East throwing in a new set of variables set to add fuel to a buildup in supply-side pressures.

Data released by the Philippine Statistics Authority (PSA) on Thursday morning showed the rise in consumer price index (CPI) gained pace in February from 2.0 percent in January this year and from 2.1 percent in February 2025.

Year-to-date inflation averaged 2.2 percent, National Statistician Claire Dennis Mapa said.

The Bangko Sentral ng Pilipinas (BSP) said the inflation numbers for February came in as expected and the latest rate has been factored into its upward revision of forecasts for this year and the next.

Private investment think tank analysts cautioned, however, that with market focus having shifted to the new variables coming in from the Middle East, upside risks are mounting on fears of global oil supply disruptions and rising fuel price expectations.

Within forecast

The BSP had set a previous target range for annual inflation at between 2 and 4 percent. For February alone, it had projected inflation to be within the 2.3 to 3.1 percent range, with upward price pressures stemming from “higher prices of rice and fish, elevated domestic petroleum prices, and increased electricity charges in Meralco-serviced areas.”

In a statement issued also on Thursday, the BSP said the February inflation print remains “within the BSP’s forecast range of 2.3 to 3.1 percent,” even as it noted that the inflation expectation has been adjusted to the upside.

The central bank stressed the inflation outlook remains “manageable, with inflation expectations well anchored.”