February 28, 2002 - The Makati Business Club Research and Information Group expects the February inflation rate to rise to a range of 3.9%-4.1% from 3.8% in January. Pressure coming from rising world crude prices is one of the reasons for the possible uptick in the February inflation rate. The Dubai crude oil benchmark rose to US$18.48 per barrel last January from US$17.83 per barrel in December 2001. On the other hand, the foreign exchange rate appreciated to an average of P51.39/US$ in January from P51.75/US$ in December 2001.

In the coming months, the cost of power may exert more pressure on inflation rate, particularly in Metro Manila. Meralco has a pending P0.30 per kilowatt-hour rate hike petition before the Energy Regulatory Commission. Furthermore, its unbundled rate proposal will reportedly pass on higher currency exchange rate adjustment to residential power consumers.

The anticipated return of the mild dryspell may also push food prices up later in the year. The National Food Authority is already planning to import rice to boost the country's rice stock this year.

The government wants to reduce this year's inflation target from 5.0%-6.0% to 4.0%-5.0%. MBC's forecast is 4.1%. The National Statistics Office revised last year's inflation rate from 6.0% to 6.1% following the upward adjustment in the December inflation rate to 4.1% from 3.9%.