Inflation in February will settle most likely at 2.9 percent, or even slower, some banking analysts said.
In the months ahead, however, food prices could turn volatile due to supply-and-demand swings, keeping economic managers on their toes, they said.
Prices of key commodities remained relatively steady in January as inflation hit 2.9 percent, the same annual growth rate recorded in December 2024, the Philippine Statistics Authority (PSA) said earlier this month.
Faster annual increases were still observed in only a few of the indices , such as those for food and non-alcoholic beverages, alcoholic beverages, tobacco and transport.
Inflation expectations, however, remained within the target range.
A number of analysts have made their forecasts ahead of next week’s official release of the February inflation rate and commodity price index.
Jonathan Ravelas, BDO lead strategist, said in a Viber message, February inflation will be steady at 2.9 percent due to “still rising food and gas prices.”
Angelo Taningco, Security Bank chief economist, in a press briefing yesterday said inflation is likely to be steady.
“We’re quarterly. For the first quarter, [we see] slightly less than 3 percent. We’re at 2.8. In January, (the actual) was 2.9 percent. We see it rising a bit in the following quarters due to base effects as inflation last year was higher,” Taningco said.
Grace Lim, UBS economist for Asia, in a separate press briefing, said they “have flagged potential volatility in inflation, stemming from food supply shocks.”
“So, in the first two months of the year, we did see potential risk from food prices, particularly vegetables. That might have weighed a bit on consumer sentiment.” Lim said.
“We do acknowledge a lot has already improved. So, food inflation, while still volatile, overall inflation has come back to within target,” Lim said.
Michael Ricafort, RCBC chief economist, in a Viber message, said he sees inflation for February slower at 2.5 percent.
The peso exchange rate has appreciated against the US dollar so far in February—the strongest for the peso in nearly two months. (This) could help ease importation costs and overall inflation. Though this (could be) offset by higher electricity rates and other utility prices and higher local fuel pump prices in recent weeks,” Ricafort said.
He said the initial implementation of the maximum suggested retail price for imported rice and the declaration of a food security emergency earlier this month could help further reduce local rice prices.
Ricafort said better weather conditions in most of the country so far in February could somewhat help increase agricultural production.
“Thus, relatively benign inflation at the 2 percent to 3 percent levels is still possible up to early 2025,” Ricafort said.
BSP Gov. Eli M. Remolona, Jr, during the last monetary policy stance meeting said the latest inflation forecasts were not materially different from the previous forecasts in December.
For 2025, the risk-adjusted inflation forecast rose to 3.5 percent from 3.4 percent in the previous meeting.
The risk-adjusted forecast for 2026 was unchanged at 3.7 percent.
The PSA said food and non-alcoholic beverages, which registered an inflation rate of 3.8 percent in January 2025, contributed 50.3 percent or 1.5 percentage points to the overall inflation for January.
PSA said lower inflation rates were noted in the indices of clothing and footwear; housing, water, electricity, gas, and other fuels; furnishings, household equipment and routine household maintenance, and other services.
Core inflation, which excludes selected food and energy items, slowed to 2.6 percent in January 2025 from 2.8 percent in December 2024.
