Thursday, 5 March 2009

Philippine February Inflation at 7.3 Percent

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Headline inflation climbed to 7.3 percent year-on-year in February from 7.1 percent in January. This was within the 6.6-7.5 percent forecast of the BSP. The uptick in February inflation was due to higher food inflation and the increase in the price of LPG during the month. Month-on-month headline inflation also increased in February to 0.5 percent from 0.3 percent in January. However, core inflation, which excludes specific food and energy items to measure generalized price pressures, was lower at 6.4 percent year-on-year in February from 6.9 percent in January.

The increase in food inflation was due mainly to the recent increase in rice prices arising from the decline in supply coming from the major rice-producing regions towards the end of harvest season. Meanwhile, the increase in the price of LPG in early February markedly slowed down the decline in fuel prices year-on-year.

Governor Amando M. Tetangco, Jr. said that the February inflation outturn, which is in line with the within-target inflation outlook, allows the BSP to maintain an accommodative monetary policy stance to ensure that there is sufficient liquidity in the system to fuel the economy’s growth requirements.

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