MANILA - Higher fuel prices and an increase in sales taxes pushed the consumer inflation to an eight-month high of 7.6 percent in February, the National Statistics Office said yesterday.

Inflation rose 6.7 percent in January compared with a year earlier.

The February reading was highest since June 2005 when the consumer price index also rose by 7.6 percent, the NSO said.

Bangko Sentral ng Pilipinas governor Amando Tetangco said the higher inflation was no surprise.

"This is consistent with the projected increase in inflation in the first half (of the year) after which there will be a deceleration in the second half," he told reporters.

The NSO said all commodity groups rose except housing and repairs. The government increased value-added tax by two percentage points last month from 10 percent.

Tetangco said the latest inflation data, along with other factors such as domestic liquidity, the foreign exchange rate and industrial activity would be taken into consideration by the central bank's monetary board when it meets Thursday to decide whether to adjust its benchmark overnight rates. The overnight borrowing rate stands at 7.50 percent and the overnight lending rate is at 9.75 percent.

The peso meanwhile hit a fresh three-and-a-half year-high against the peso Tuesday, hitting 50.94 to the dollar after opening at P51 a day after the government reported a lower-than-expected January budget deficit.*AFP

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