MANILA — Lower food prices slightly reduced headline inflation in the country to 4.2 percent in February from 4.3 percent the previous month, the government said Friday.

The rate is within the official forecast of 3.4 percent to 4.5 percent for the month, and brings inflation for the first two months of the year to 4.3 percent. Inflation in February 2009 was 7.3 percent.

The central bank said that inflation within its forecast for the year of 3.5 percent to 5.5 percent allows flexibility in timing an exit strategy from the extra stimulus given to the economy because of the financial crisis.

Core inflation, which excludes volatile items in the consumer price index, jumped to 3.6 percent in February from 3 percent in January.

"We need to watch with eagle eye potential buildup in demand pressure as shown by higher core inflation," said central bank Deputy Governor Diwa Guinigundo. (AP)