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Philippines inflation slows for first time in four months in Feb
[MANILA] Philippine annual inflation slowed for the first time in four months in February as the costs of food, transport and utilities eased, the statistics agency said on Thursday.
Consumer prices rose to 2.6 per cent in February from a year earlier after a 2.9 per cent rise in the previous month. Analysts in a Reuters poll had expected a 3.0 per cent rise.
Core inflation, which strips out volatile food and fuel items, eased to 3.2 per cent in February from 3.3 per cent in January.
A decline in prices would allow the central bank, if needed, to cut interest rates beyond what Governor Benjamin Diokno had committed, to protect the Philippine economy from the fallout from the coronavirus outbreak.
While Mr Diokno remained committed to cutting interest rates by another 25 basis points this year after the quarter-point cut in February, he has said that he will consider more cuts in rates and banks’ required reserves if conditions called for them.
Mr Diokno said on Wednesday there will no off-cycle policy rate cut and that the Federal Reserve’s decision to cut rates, the impact of coronavirus, and the February inflation rate would all be tabled at the central bank’s March 19 policy meeting.
The central bank previously estimated the virus outbreak could shave up to 0.2 percentage points off first-quarter growth and 0.4 percentage points off second-quarter growth, but the forecasts were being reviewed.
Mr Diokno said growth could be at 6.0 per cent this year, below the government’s 6.5 -7.5 per cent target for the year.
REUTERS