Inflation soars to 4.7 percent in February as pork prices rise

ABS-CBN News

Posted at Mar 05 2021 09:18 AM | Updated as of Mar 05 2021 10:16 AM

Inflation soars to 4.7 percent in February as pork prices rise 1
Pork sellers sell frozen stock at the Kalentong Market in Mandaluyong City on February 9, 2021. Mark Demayo, ABS-CBN News

MANILA - Philippine inflation quickened further in February, its highest in more than two years, driven by higher pork prices, the state statistics bureau said on Friday.

The consumer price index rose 4.7 percent from 4.2 percent in January, the Philippine Statistics Authority said. This was within the 4.3 to 5.1 percent range forecast of the Bangko Sentral ng Pilipinas.

However, the February inflation breached the upper end of the government's 2 to 4 percent target for the second straight month.

Inflation soars to 4.7 percent in February as pork prices rise 2
Philippine inflation quickens further in February. Data: Philippine Statistics Authority. Processed by: ABS-CBN Data Analytics

"Ang pangunahing dahilan ng pag angat ng inflation nitong Pebrero 2021 ay ang mas mabilis na pagtaas ng presyo ng food and non-alcoholic beverages. Ito ay dahil sa pagtaas ng presyo ng karne, partikular ang baboy," National Statistician Dennis Mapa said.

(The main driver for the inflation this February 2021 is the faster increase in prices of food and non-alcoholic beverages. This is due to the increase in prices of meat, particularly pork)

Pork meat inflation rose 20.7 percent from 17.1 percent in January 2021, the PSA said.

Pork prices surged in the last few months due to a supply shortage caused by the African swine fever. President Rodrigo Duterte earlier ordered a price cap on pork and chicken meat products in Metro Manila. 

Inflation soars to 4.7 percent in February as pork prices rise 3
Food and transport inflation. Data: Philippine Statistics Authority. Processed by: ABS-CBN Data Analytics

Core inflation for the month is at 3.5 percent, data showed.

"If trend continues, central bank may be pressured to start tightening its monetary policies or at least have a hawkish rhetoric," Trading Edge chief investment strategist Ron Acoba said.

February's inflation was "expected," said BDO chief market strategist Jonas Raveles. March inflation could reach 5.1 percent, he said.

Projected upward trend in inflation is "temporary," while the overall balance of risks to future inflation leans towards the downside mainly due to uncertainties caused by the pandemic to the economy, the BSP said.

Upside risk "could emanate from the possibility of an early roll out of COVID-19 vaccines," the central bank said.

"The sources of near term inflation are supply side shocks in nature that should not require a monetary response unless they lead to second round effects," the BSP said.

Bangko Sentral ng Pilipinas earlier raised its inflation forecast for the year to 4 percent from 3.2 percent, saying that it would likely remain elevated in the coming months. 

However, the Monetary Board, in its first policy meeting for 2021, kept interest rates steady, despite the rising inflation trend in the last few months.

The BSP's overnight reverse repurchase rate, which is used by banks to price loans, was kept at a record low of 2 percent.

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-- with a report from Warren de Guzman, ABS-CBN News