MANILA, Philippines - Inflation or the rise in prices of goods and services sped up to 3.4% in February, a 5-month high, due to higher cigarette and liquor prices, the NSO reported.
The February figure was higher than January's 3%, and the fastest since September 2012, when inflation stood at 3.6%.
It was near the high end of the Bangko Sentral ng Pilipinas' (BSP) forecast for the month of 2.8% to 3.7%.
The National Statistics Office (NSO) said there was "double-digit annual increment in the alcoholic beverages and tobacco index."
This is the second month that the index rose by double digits following the implementation of the reformed sin tax law this year. Republic Act 10351 raised taxes on "sin" products made from tobacco and alcohol.
Apart from this, the NSO said faster rise in the heavily-weighted food and non-alcoholic beverage index also pushed inflation up.
Core inflation, which excludes volatile price movements of some food and energy items, also accelerated to 3.8% in February from 3.6% in January.
February's rate was still manageable, a Reuters report quoted BSP Governor Amando Tetangco as saying.
The central bank chief gave assurance that interest rates will be adjusted "as needed" to keep inflation within targets.
Inflation is one of the main factors the BSP looks at when adjusting its interest rates, which are benchmark for rates local banks charge on their loans.
Raising the rates will soften demand for bank loans. This, in turn, will ease consumption and investments, helping prices stay at current levels.
The BSP's Monetary Board, which will hold its next policy meeting on March 14, has kept overnight borrowing and lending rates at record lows of 3.5% and 5.5%, respectively. - Rappler.com