Headline inflation slowed down to 3.8 percent year-on-year in February 2019 from 4.4 percent in the previous month. The resulting year-to-date average of 4.1 percent is slightly higher than the Government's inflation target range of 3.0 percent 1.0 percentage point for the year. Core inflation�which excludes selected volatile food and energy items to measure underlying price pressures�has also decelerated, to 3.9 percent in February from 4.4 percent in January. Month-on-month seasonally-adjusted headline inflation was unchanged at 0.1 percent in February 2019 compared to the previous month's level.

The slowdown in inflation for February 2019 was attributed mainly to slower price increases in both food and non-food items. Year-on-year food inflation continued to moderate due to the lower inflation rates of most key food items, including rice, meat, fruits, and vegetables. Corn price also declined relative to year-ago level. Likewise, non-food inflation eased as the inflation rates of large-weighted components slowed down, such as housing rentals, water supply and other services relating to dwelling, transport services, and restaurants.

The latest inflation outturn further affirms the BSP's projections that average inflation is expected to fall within the Government's 2-4 percent target range in 2019 and 2020, highlighting the abatement of supply-side pressures in 2018. The BSP will continue to keep a close watch over possible emerging risks to the inflation outlook to ensure that the monetary policy stance remains appropriate.

Source: Bangko Sentral ng Pilipinas (BSP)