Feb inflation

of typical households consuming 200 kWh a month and brought the February rate to P9.09 per kWh. Dumalagan associated faster

- celerating prices, which commenced after major oil producers agreed to limit output and stabilize crude prices in December. The Land Bank economist said the BSP may not yet increase its key inmodest across the board and likely below the mid-point of the BSP’s

“Moreover, the steady decline in the average yields of the two tenors of the BSP’s term deposit facility in the past few weeks could mean that hiking policy rates might not yet be the BSP’s immediate priority. Given current developments, a mid-year adjustment in BSP’s policy settings is more probable,” he added.

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, said the the fastest year-on-year acceleration - tion hit 3.7 percent.

“With world oil prices having steadily risen since January 2016, this has gradually pushed up retail petrol prices and electricity prices, adding to to move into the upper range of the BSP getting increasingly concerned the depreciation of the peso against the US dollar in late 2016 and early 2017.

“With the US Fed expected to hike US interest rates three more times in 2017, with the next US rate hike possibly as early as the Federal Open Market Committee meeting on 14 to 15 March, Asian central banks will be concerned about potential currency markets turbulence with the USD likely to appreciate against many emerging markets currencies,” he said.

The BSP is expected to begin tightening monetary policy later this year, due to the upturn in headline

- nomic growth and the impact of peso depreciation on import prices, Biswas added. BDO Unibank Inc., Natixis and

- tion at 3.3 percent.

Jonathan Ravelas, market strategist at BDO, said a 3.3 percent inflation rate in February “could push the BSP to raise its benchmark rate” during its March 23 monetary policy meeting.

Natixis senior economist Trinh Nguyen said higher oil prices and strong demand will continue to expect an unfavorable base and a small pickup of month-on-month increase to push headline to 3.3 percent year-on-year,” she said.

Nguyen said the BSP is likely to adopt a more hawkish tone, although inflation within the 2 percent 4 percent target would still be comfortable. “We expect the BSP to hike rates in the second half of 2017 to follow the Fed. The peso is expected to depreciate further on higher import costs and a stronger dollar,” she added. up amid an increase in prices of food items and petroleum products, Metrobank Research analyst Pauline Revillas.

On the other hand, ANZ research economist Eugenia Victorino sees prices continued to contribute positively to the gains in headline prices in line with the regional trend.

“Meanwhile, we expect utility prices to have increased on the back of higher electricity generation charges over the month,” she added. Singapore’s DBS and the UK’s Barclays placed their estimates at 3 percent.

The current trend is clearly tilted hitting the ceiling of the target of the BSP is still unlikely at this point barring any oil price shock until 2019, said Gundy Cahyadi, economist at DBS. “Which means that the central

- tion risks in the near-term,” he said.

- tionary risks remain tilted towards the upside, particularly given oil price movements. Cahyadi noted. “It is also interesting that the central bank seems fairly comfortable with recent peso movements and has, in fact, factored in possible (further) weakening of the currency,” he said.

“While previous comments from - gested that the BSP won’t necessarily respond to any rate adjustment in the US, we reckon that a hike by the US Fed in March will embolden the BSP to kick-off its own policy normalization,” he added.

Rahul Bajoria, an economist at is likely to climb to the mid-point of BSP’s target.

The lowest estimate of 2.7 percent was given by London-based research consultancy Capital Economics. Inflation has by now probably peaked with fuel prices unlikely to go up any further and little sign that increasing.

“Low inflation will give the central bank room to keep interest rates low over the coming year. Whereas the consensus is expecting rate hikes, we expect the key policy rate to be left unchanged throughout 2017 at 3 percent,” Gareth Leather, an economist at Capital Economics.

BSP Governor Amando Tetangco Jr. has noted there is nothing to be alarmed about the central bank’s 3.1 percent to 3.9 percent projection for February.

“The increase in domestic petroleum prices, jeepney and taxi fares and electricity rates of Meralco-serviced areas could exert upside pressures to - - tion is seen to be temporary as upside pressures are largely supply-side in nature, Tetangco said.