MANILA - Inflation in February likely settled with the 2.8 to 3.6 percent, the Bangko Sentral ng Pilipinas' Department of Economic Research said.

Inflation in January eased to 3 percent as the Philippine Statistics Authority shifted to using 2018 as the base year to reflect updated prices. Previously, the PSA used 2012 as base year.

The BSP estimate takes into account the spikes in the prices of oil, rice and meat which are seen as "the primary sources of inflationary pressures during the month," the central bank said in a statement.

But these can be partially offset by lower electricity rates in Meralco-serviced areas and the decline in fish and vegetable prices as supply challenges ease, the BSP said.

February's inflation numbers are set to be released on Friday.

"Looking ahead, the BSP will continue to monitor emerging price developments and possible second-round effects to help achieve its primary mandate of price stability that is conducive to balanced and sustainable economic growth of the economy," it said.

The BSP earlier signaled it would start easing the stimulus placed during the COVID-19 pandemic to support recovery, and as inflation eases back to within the government's 2 to 4 percent target range.

Analysts expect the central bank to tighten the benchmark interest rate this year.

The country's key borrowing rate was kept at a record low of 2 percent in last month's monetary policy-setting meeting.

• Bangko Sentral keeps benchmark rate unchanged to support growth

BSP Governor Benjamin DIokno said it has room to "maneuver" but is keeping an eye on the monetary policy actions of the US Federal Reserve.

Although the Philippines is also in a better shape to weather geopolitical crises such as the conflict between Russia and Ukraine, the BSP said a significant increase in Dubai crude oil price could trigger an upward revision of its inflation outlook.

The BSP earlier said inflation, which averaged 4.5 percent in 2021, could settle at 3.7 percent in 2022 and 3.3 percent next year.

• Fuel, flour prices expected to rise as Ukraine crisis continues
• Bangko Sentral has 'room to maneuver', keeps an eye on Fed: Diokno

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