Lower food prices drove inflation down to 2.65 percent in February from 2.9 percent the preceding month, according to the mean average estimate made by six banks polled by Malaya Business Insight.
Economists from three of the global banks operating in the country said inflation last month settled below the 2.9 percent recorded in January 2025.
Aris Dacanay, HSBC Global Research Asean Economist, said in an email on Monday their February inflation forecast stood at 2.6 percent.
“Headline CPI likely decelerated year-on-year. The biggest driver of the deceleration was likely rice,” he said.
“Not only were there favorable base effects on rice, but rice prices fell on a month-on-month basis,” Dacanay added.
HSBC Global said retail fuel prices also began to ease with global oil prices falling recently.
Citi economist for the Philippines Nalin Chutchotitham placed Citi’s inflation estimate at 2.8 percent.
“Despite the continued decline in rice prices, meat and some vegetables prices are higher (especially onions),” Chutchotitham said in a separate email on Monday.
Citi expects a slightly higher electricity rate offsetting the decline in crude oil prices.
For Standard Chartered, inflation hit 2.5 percent last month.
“There’s quite a bit of negative base effect in February itself. So, that should help weigh down on inflation. Just on the basis of base effect, (inflation) should already moderate,” Edward Lee, StanChart chief economist and head of FX, Asean and South Asia, said in another email.
“And rice prices are also going to be lower. So, that should help,” Lee added.
The Bangko Sentral ng Pilipinas (BSP) expects inflation to register between 2.2 percent and 3.0 percent in February.
Official data will be released on Wednesday.
Bangko Sentral Gov. Eli M. Remolona Jr. on Friday said electricity rates and oil prices will provide upward price pressures, and higher prices of key agricultural commodities such as fish and meat.
“Nonetheless, these are expected to be offset in part by lower prices of rice, fruits, and vegetables as well as negative base effects,” the central bank official said.
The Monetary Board will continue to take a measured approach in ensuring price stability conducive to balanced and sustainable growth of the economy and employment, Remolona added.
The Philippine Statistics Authority earlier said price increases of key commodity groups remained relatively steady in January as inflation hit 2.9 percent, the same annual rate recorded in December 2024.
HSBC Global also expects the risks to have a downside bias,with room for rice prices to further decline as the government is directly boosting market supply.
However, Dacanay said substantial price pressures were coming from food items other than rice, such as cabbages, bitter melons, onions, and eggplants.
“Prices … rose within the range of 30-50 percent year-on-year as supply conditions remain tight from past typhoons,” Dacanay said.
StanChart’s Lee finds that inflation expectations are so far well-anchored, particularly because of rice.
“Rental inflation may continue to moderate. But upside risks are in store for electricity,” he added.
In an earlier report, Malaya Business Insight cited estimates for February inflation made by domestic banks, namely BDO, Security Bank and RCBC.
Jonathan Ravelas, BDO lead strategist, said inflation will be steady at 2.9 percent due to “still rising food and gas prices.”
However, Angelo Taningco, Security Bank chief economist, said the pace will even be slower at 2.6 percent.
The inflation drivers last month were seen to include higher electricity prices and local petroleum products, as well as those of select food items such as meat, fish, fruits, and vegetables.
Michael Ricafort, RCBC chief economist,was quite certain that inflation settled at 2.5 percent in February.
The implementation of a maximum suggested retail price on imported rice and the food security emergency declared earlier last month will potentially lower local rice prices further still, he said.
Better weather conditions in most of the country in February will also help increase agricultural production, Ricafort added.
