By Katherine K. Chan, Reporter
PHILIPPINE INFLATION accelerated to a 13-month high in February as rising costs for rice, fuel, electricity and other utilities added pressure on household budgets, the Philippine Statistics Authority said on Thursday.
The patron price index (CPI) picked as much as 2.4% from 2% in January and a couple of.1% in February 2025. It was the fastest since January 2025, when inflation hit 2.9%.
February inflation fell inside the Bangko Sentral ng Pilipinas’ (BSP) 2.3%-3.1% forecast and matched the two.4% median estimate in a BusinessWorld poll of 17 analysts.
February also marked the second straight month that inflation stayed inside the central bank’s 2%-4% goal, bringing the two-month average inflation rate to 2.2%.
“Overall price conditions remain stable,” Economy Secretary Arsenio M. Balisacan said in a press release. “Nevertheless, we’re mindful of recent geopolitical developments, which we’re closely monitoring, together with domestic supply conditions of key commodities.”
The peso’s purchasing power remained at P0.76 for each P100 price of products and services in 2018, the identical level recorded in January and the bottom because the base 12 months was adopted.
National Statistician Claire Dennis S. Mapa said faster price increases in food and nonalcoholic beverages, housing and utilities and restaurants and accommodation services pushed inflation higher last month.
Inflation for food and nonalcoholic beverages accelerated to 1.8% from 1.1% in January, driven by faster price increases for vegetables, fish and seafood, in addition to a slower decline in cereals and cereal products.
Inflation for restaurants and accommodation services also quickened to 4.4% from 4% a month earlier. Prices for restaurants, cafés and similar establishments rose 4.5% from 4.1% pace in January.
Core inflation, which strips out volatile food and fuel prices, edged as much as 2.9% in February from 2.8% in January and a couple of.4% a 12 months earlier. This was the fastest since June 2024.
ENERGY COSTS
Inflation for housing, water, electricity, gas and other fuels, which accounted for nearly 30% of the headline CPI, rose to three.5% in February from 3.3% a month earlier.
Fuel prices have been rising steadily in recent weeks, with diesel and kerosene marking 10 consecutive weekly increases and gasoline climbing for eight straight weeks.
In February alone, pump price adjustments led to a net increase of P3.20 a liter for gasoline, P4.40 for diesel and P3.50 for kerosene.
Liquefied petroleum gas (LPG) prices also increased after oil corporations implemented a P1.50- to P1.55-per-kilo hike, bringing the value of a normal 11-kilo household tank to P836.50 to P1,137.05.
Rising tensions within the Middle East have raised concerns about possible disruptions in global oil supply, which could further push up energy costs for net oil importers akin to the Philippines.
The Department of Economy, Planning and Development said authorities are monitoring domestic fuel price movements and will intervene if global oil prices rise sharply.
“Further, the federal government will implement measures to cut back fuel consumption, first by government offices, and we encourage the private sector to do the identical,” Mr. Balisacan said.
These measures include using shuttle buses, encouraging carpooling and adopting flexible work arrangements akin to work-from-home or compressed workweeks.
Electricity costs also rose after Manila Electric Co. increased its rate by 22.26 centavos per kilowatt-hour (kWh) in February to P13.1734 per kWh from January. Electricity inflation climbed to six.7% from 6.5%.
Rental inflation also edged higher to three% from 2.9%, while inflation for water supply rose to 4% from 3.5%.
Rice prices, a key driver of Philippine inflation, showed signs of firming in February.
Rice inflation remained negative at -3.4%, but this was a slower decline than -8.5% in January, indicating a gradual rebound in prices.
Regular milled rice prices fell 2.5% 12 months on 12 months to a median of P46.01 per kilo but rose 5.14% compared with January levels.
Mr. Mapa said rice inflation could move closer to zero — and even turn positive — if month-on-month price increases persist in March.
Meanwhile, inflation for the underside 30% of income households accelerated to 2.5% in February from 1.6% in January and 1.5% a 12 months earlier, the fastest in greater than a 12 months.
INFLATION OUTLOOK
The BSP said inflation expectations remain well anchored despite the February uptick, although authorities are assessing the potential impact of Middle East tensions on the domestic economy.
“The BSP will be certain that policy settings remain consistent with its pursuit of price stability conducive to sustainable growth and employment,” it said in a press release.
Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said the most recent data point to rising risks, particularly from global oil markets.
“While inflation stays manageable, the third straight monthly uptick tells us upside risks are constructing — especially if global oil supply disruptions persist,” he said via Viber.
Chinabank Research said inflation might average around 3.6% this 12 months, near the upper end of the BSP’s goal, though the outlook could worsen if geopolitical tensions persist.
Morningstar DBRS also warned that net oil-importing economies akin to the Philippines remain vulnerable to rising energy costs and potential supply disruptions stemming from the war within the Middle East.
The Bangko Sentral ng Pilipinas (BSP) should hold rates of interest regular, relatively than cut or raise, amid rising global oil price pressures from the Middle East war, in keeping with the Institute for Risk and Strategic Studies, Inc. (Salceda Research).
In a report released on Wednesday, the think tank said further rate adjustments may be unwise amid uncertainties over crude prices stemming from disruptions linked to the war between Israel and Iran.
“The suitable response is a pause, not a hike — the inflation is supply-driven and rate hikes wouldn’t reduce oil prices,” Salceda Research said. “The BSP should communicate clearly that the easing cycle is on hold, not reversed, to avoid market overreaction.”
The Strait of Hormuz, a critical oil transit point, has turn out to be a flashpoint after Israeli and US military strikes on Iran. Roughly one-fifth of the world’s oil supply passes through the strait, and any disruption could push global oil prices higher, squeezing import-dependent economies akin to the Philippines.
Salceda Research estimated that sustained crude prices above $80 per barrel for greater than a month could push Philippine inflation toward 4%, near the upper limit of the central bank’s goal band. “Second-round consumer price index effects will push inflation toward the 4% upper goal boundary inside two quarters,” it added.
At its first policy review of 2026, the BSP cut the important thing rate of interest by 25 basis points (bps) to 4.25%, the sixth consecutive reduction and a complete easing of 225 bps since August 2024.
BSP Governor Eli M. Remolona, Jr. has noted that easing alone won’t stimulate an economy constrained by weak sentiment and lingering governance issues.
Salceda Research also cautioned that the Philippine peso could come under renewed pressure, potentially testing P59.50 to P65 a dollar.
The peso briefly recovered to around P57 a dollar last month after record lows in January but has remained above P58 amid geopolitical uncertainty.
“The BSP should allow the peso to depreciate inside the P59.50-P61 band… intervening [only] to forestall disorderly overshooting beyond P62,” the think tank said.
Rapid moves past P62 could front-load inflation and trigger capital outflows, it said. “Graduated, transparent intervention is preferable to defending a hard and fast level.