MANILA — A combination of higher minimum fare in public utility vehicles and increases in electricity as well as oil prices likely pushed inflation to its highest level in over two years, Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. said Monday.

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“The BSP forecast suggests that February inflation could settle within the 3.1-3.9 percent range. The increase in domestic petroleum prices, jeepney and taxi fares, and electricity rates of Meralco-serviced areas could exert upside pressures to inflation during the month,” Tetangco said in a text message to reporters.

The minimum jeepney fare rose to P8 this month from P7 previously, alongside the increase in the taxi flag-down rate to P40 from P30.

The BSP’s forecast range will exceed the previous high of 2.7-percent headline inflation or the rate of increase in prices of basic goods posted in December 2014.

As of January, monthly inflation was settling below the 3-percent level for 26 straight months.

But Tetangco said that “the uptick in the projected inflation is seen to be temporary as upside pressures are largely supply-side in nature.”

“Moving forward, the BSP will continue to monitor closely emerging price conditions to ensure price stability conducive to a balanced and sustainable economic growth,” Tetangco added.

Last month, the Monetary Board raised its inflation forecasts for 2017 and 2018 to 3.5 percent and 3.1 percent, respectively, from 3.3 percent and 3 percent previously.

The Monetary Board, the BSP’s highest policy-setting body, attributed its higher forecasts to increasing fuel prices on top of a weaker peso since the fourth quarter of last year.

The peso slid to the 50:$1 level—an over 10-year low—this month.

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The adjusted projections nonetheless remained within the government’s 2-4 percent target for the next three years.

The Monetary Board during its Feb. 9 policy meeting nonetheless kept key policy rates steady as it noted that its latest baseline forecasts “continue to indicate that the future inflation path will remain within the target range of 2-4 percent for 2017-2018.”

The last two years saw below-target annual inflation rates: a two-decade low of 1.4 percent in 2015, and 1.8 percent in 2016. SFM

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