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Year-on-year inflation in the Philippines slowed to 8.6 per cent in February 2023 from 8.7 per cent in January after rising for five months straight as the price increase of certain food commodities and energy eased, official figures revealed on Tuesday.

The Philippine Statistics Authority (PSA) said on Tuesday that the inflation rate in February 2022 was lower at 3 per cent, reports Xinhua news agency.

The average inflation rate for the first two months of this year stood at 8.6 per cent.

"Among the 13 commodity groups, the transport was the sole driver of the downtrend of the overall inflation during the month, recording a 9 per cent inflation rate in February 2023 from 11.1 per cent inflation in January 2023," PSA head Dennis Mapa told a news conference.

In contrast, he said nine commodity groups showed higher inflation rates, including food and non-alcoholic beverages at 10.8 per cent and alcoholic beverages and tobacco at 11 per cent.

Meanwhile, Mapa said the core inflation, which excludes volatile food and energy items in the headline inflation, rose to 7.8 per cent in February 2023 from 7.4 per cent in January 2023.

In February 2022, core inflation was lower at 1.9 per cent.

National Economic and Development Authority Secretary Arsenio Balisacan said energy and food inflation remained the top contributors to inflation in February, accounting for 1 and 0.9 percentage points (ppt), respectively, followed by restaurant services contributing 0.8 ppt and house rentals with 0.7 ppt.

Meanwhile, he added public transport contributed 0.6 ppt.

Balisacan stressed the need to "rethink" the government strategies to combat rising food prices. He said that domestic, supply-side constraints primarily drive the country's current high inflation.

"Agricultural imports were ill-timed, and food supplies have been inadequate. The solution is to get to the root of the problem, including fixing the bottlenecks along all segments of the agricultural value chain," Balisacan added.

In January 2023, inflation rose to 8.7 per cent from 8.1 per cent in December 2022, going beyond the Bangko Sentral ng Pilipinas (BSP)'s inflation forecast of 7.5 to 8.3 per cent and private sector economists' median estimate of 7.6 per cent.

The continued increase was mainly due to food supply constraints and higher utility rates.

The BSP forecasts that inflation will remain above target in the near term. However, it expects inflation to slow to 3.1 per cent in 2024.

Inflation could stay above 4.0 per cent until December 2023. It will revert to the lower end of the target range of 2 per cent to 4 per cent by January 2024, mainly due to adverse base effects and the likely deceleration of global oil and non-oil prices.

To maintain price stability, the BSP hiked its policy rate by 50 basis points to 6.0 per cent, effective on February 17.