The Philippines’ inflation rate rose for the third month in a row, putting the economy in a delicate position ahead of the expected surge in prices of goods in the wake of the war in Iran.
Consumer prices increased 2.4% in February from a year ago, the Philippine Statistics Authority said on Thursday. That matched the median estimate in a Bloomberg News survey and compares with the 2% recorded in January.
Price pressures would narrow the space for further monetary easing at a time when economic momentum remains weak. The Bangko Sentral ng Pilipinas, which aims to keep inflation within the 2%-4% range, has reduced its key rate by 225 basis points so far and signaled it could be nearing the end of the easing cycle that began in August 2024.
Inflation is expected to accelerate anew in coming months as the Iran war deepens, risking a sustained disruption in global oil supply. The Philippines, which relies heavily on fuel and food imports, is widely seen by economists as one of the most vulnerable in the region to inflation and growth risks spurred by the conflict.
These concerns have already driven the Philippine peso lower, which could further broaden imported inflation and limit the central bank’s ability to reduce borrowing costs.
The latest policy rate cut in February came after the nation’s economic growth slowed to 3% in October-December, the weakest pace in 14 years outside of the pandemic. BSP Governor Eli Remolona last month said monetary policy “cannot do much more” to support economic growth at this point.
