MANILA-- Inflation in February 2017 rose to 3.3 percent from 2.7 percent in the previous month due to upward price adjustments in both food and non-food items, according to the National Economic and Development Authority (NEDA).
"The inflation outlook for 2017 remains within the government's target of 2.0 to 4.0 percent However, risks to the inflation outlook appear to be tilted to the upside. This could drive inflation towards the higher end of the target," said Socioeconomic Planning Secretary Ernesto M. Pernia.
Faster price increases in rice, meat, fish, and vegetables pushed up the food subgroup inflation to 4.3 percent in February 2017 from last month's 3.6 percent.
For meat products, the country's temporary ban on poultry imports from South Korea, Germany, France, Netherlands, Czech Republic, and Kuwait in response to the Avian Flu outbreak may have contributed to the limited supply.
Also, the higher rice prices can be attributed to lower rice stock inventories, which fell by 17.9 percent in January 2017 to December 2016, due to the contraction in palay production in the fourth quarter of 2016.
In addition, the price increases of housing, water, electricity, gas, and other fuels drove the non-food subgroup inflation to 2.5 percent in February 2017 from last month's 2.0 percent.
"The risks to inflation that we see on the external side include increase in the price of oil and the depreciation of peso," said Secretary Pernia.
Another risk is the effect of the National Food Authority's memorandum that allowed the entry of rice imports under the minimum access volume program only from October 2016 until 28 February 2017.
"This will tighten the rice supply, which translates to higher food prices," said Pernia.
Within the region, all the ASEAN-5 economies except Thailand experienced faster inflation rates in the first two months of 2017, which coincides with the rising oil prices in the international market.
Source: Philippines News Agency