Annual consumer-price increase was at its slowest in five months in February after food and utility costs rose on a more moderate pace.

Slowing inflation allows monetary authorities to sustain their gradual policy easing, which is aimed at supporting economic growth amid global headwinds.

Key points   

• The Philippines’ annual headline inflation was 2.1% in February, that’s the slowest pace since September 2024 when consumer-price rise was below the lower-end the Bangko Sentral ng Pilipinas’ (BSP) 2-4% full-year average target.
• Core inflation, which excludes volatile food and energy items, decelerated to 2.4% in February from the 2.6% recorded in the preceding month.
• Related article: Inflation Preview: Slowdown amid a foodfest 
• Despite the slowdown in food-price acceleration, it remained the biggest contributor to headline inflation in February.

Point of view 

• Metrobank revises its full-year inflation forecast this year to 3.1% from 3.4% previously, barring major supply-side shocks. Meanwhile, we keep our 2026 full-year inflation forecast at 3.0%.
• Given the low inflation environment, we see a possible policy-rate cut at the next Monetary Board meeting in April.
• Related article: BSP reaches into toolkit for another kind of cut
   

(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)    

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