MANILA (UPDATE) - Inflation in February slightly decelerated due to the slower movement of transport-related prices including gasoline, diesel and motorcycles, among others, the state statistics bureau said on Tuesday.

The consumer price index rose 8.6 percent in February, slightly slower than the 8.7 percent the previous month, the Philippine Statistics Authority said.

This was within the Bangko Sentral ng Pilipinas's 8.5 to 9.3 percent forecast range. It was, however, way above the government's 2 to 4 percent target range.

Transport inflation slowed to 9 percent, with slower increases in the prices of gas at 3.8 percent from 9.6 percent, diesel at 14.2 percent from 30.5 percent and motorcycles to 2.7 percent from 3.5 percent, National Statistician Dennis Mapa said.

“Isang bumaba talaga yung transport, siya ang main contributory sa pagbaba ng inflation. Sa March titingnan natin, malaking contributory ulit ay transport, may announced na pagtaas ngayong linggo.,” Mapa said.

(One of the main contributors of slower inflation is transport. In March, we will see how it would contribute since there is an announced price hike this week.)

• Presyo ng diesel, higit P1 ang taas sa Marso 7

Food supplies are normalizing and agriculture is getting attention, which is seen to help ease the pressure on food prices, economist Victor Abola told ANC.

The slower February inflation is "a good breather," he said.

"The big driver as what was mentioned was transport costs, which have gone down since crude oil prices are down,” Abola said.

• Inflation likely between 8.5 to 9.3 pct in February says BSP

CORE INFLATION CLIMBS, HIGHEST IN OVER 2 DECADES

However, core inflation, which excludes volatile food and fuel prices, rose to 7.8 percent in February from 7.4 percent the previous month. This was the highest since December 2000 when core inflation was recorded at 8.2 percent.

Inflation for the bottom 30 households also accelerated to 9.7 percent, higher than the headline inflation, driven by food inflation, Mapa added.

The central bank expects inflation to stay above target this year before easing back within the 2 to 4 percent range in 2024.

"Inflation is projected to remain above the target until early Q4 2023 before decelerating close to the low end of the target range by January 2024 due mainly to negative base effects and the likely decline in global oil and non-oil prices. The inflation path continues to be driven by supply-side factors as pressures from elevated global and domestic commodity prices broaden," the BSP said in a statement.

GOV'T EYES FERTILIZER IMPORTS

In a Palace briefing, Finance Secretary Benjamin Diokno welcomed the slower inflation and noted that the government should focus on food prices.

"Ang lumalabas ay talagang food items ‘no, so major items like vegetables, meat, sugar, fish," said Diokno.

"And then so in relation to that, I reported kung gaano karami tayong kailangang angkatin na rice, yellow corn, raw and refined sugar, pork and fish, so I stated that," he added.

This is the reason why the government is planning to import fertilizers from Saudi Arabia and China to boost agricultural production as this would help tame inflation.

He also suggested to the President the fast-tracking of government processing on clearances for agricultural goods, so importation will be swift.

"May mga requirements kasi na naka-delay ng paglabas ng produkto from … let’s say kapag nag-angkat ka, bago mo mailabas sa Customs, maraming mga kailangang mga requirements, ganoon. So these are again part of the recommendation," the finance chief said.

"So that’s one. And then, remove the required authority to release imported goods or ATRIG, iyon; ito naman ay BIR, Customs. So sinabi ko kay Presidente, to the extent na puwede naman itong tanggalin legally ay tatanggalin natin para mabilis lang ang labas ng food imports from the Customs," he added.

The BSP earlier raised the country's benchmark interest rate by 50 basis points to 6 percent to tame inflation.

With inflation still elevated, analysts expect the BSP to raise rates by another 50 bps in its next meeting in May.

• Bangko Sentral hikes benchmark rate by 50 bps to 6 percent, highest since Aug. 2008
• Inflation quickens to 8.7 pct in January as housing, water, power costs rise
• Inflation likely between 8.5 to 9.3 pct in February says BSP

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