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Finance Secretary Ralph Recto has underscored that the latest inflation rate of 3.4 percent for February falls within the government’s target band of 2 percent to 4 percent, further noting that the government is proactively preparing to mitigate the effects of El Nino on inflation, which is forecasted to peak this month and persist until May.

“The government has a comprehensive plan in place??the Reduce Emerging Inflation Now or REIN??to keep the prices of goods and services stable and affordable. The deliberate implementation of REIN will help us keep the inflation rate within manageable levels, especially with the looming threat of El Nino,” the finance chief said.

“As I have said before, reducing inflation and protecting the purchasing power of Filipinos is a top priority of this administration. The government and the Bangko Sentral ng Pilipinas [BSP] are working in sync to ensure that both non-monetary and monetary measures prioritize growth and price stability,” he added.

Inflation is the rate at which the overall prices of goods and services have increased over time.

The inflation rate in February saw a modest uptick to 3.4 percent from 2.8 percent in January, within the BSP’s forecast of 2.8 percent to 3.6 percent for the month. This brings the year-to-date (YTD) inflation rate to 3.1 percent.

The main contributors to February inflation were food and non-alcoholic beverages (1.7 percentage points (ppt) of the 3.4 percent overall inflation), restaurants and accommodation services(0.5 ppt), and housing rentals (0.4 ppt).

Food and non-alcoholic beverages inflation slightly rose to 4.6 percent in February from 3.5 percent in the previous month mainly due to rice (2.1 ppts contribution) as well as flour, bread, and other bakery products (0.2 ppt). Meanwhile, prices of vegetables (-0.3 ppt) decelerated in February.

The increase in rice inflation in February at 23.7 percent year-on-year (YoY) is mainly due to higher rice prices domestically and internationally.

Factors such as El Nino have impacted major rice-exporting countries like Thailand and importers alike have created supply-demand imbalances. Additionally, export curbs in India, the largest rice exporter, contributed to a surge in international rice prices.

Meanwhile, non-food inflation registered a slight uptick at 2.4 percent in February 2024, from 2 percent in the previous month. The main contributors were restaurants and accommodation services (0.5 ppt), housing rentals (0.4 ppt), and personal care (0.2 ppt).

Nevertheless, these were offset by the continued deceleration of electricity, gas, and other fuels (4.3 percent from 4.7 percent in January 2024) as well as the operation of personal transport equipment (-1.5 percent from 6.5 percent).

The DOF is closely monitoring the vigorous implementation of strategies under its REIN plan to mitigate the potential effects of El Nino on food security. DOF