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By Maricel E. Burgonio, Reporter
CONSUME price increases this year
may average below the official target, according to the Bangko
Sentral ng Pilipinas (BSP).
In its first-quarter inflation
report, the BSP said inflation is likely to edge lower than the
4-percent to 5-percent target range it set earlier, citing the
recent downtrend in price increases.
The BSP earlier said that
inflation may have bottomed out in March at 2.2 percent, and range
from 2 percent to 2.7 percent in April due to the subsiding effects
of the expanded value-added tax and low oil and food prices.
For next year, inflation may
settle between 3 percent and 5 percent, the central bank said.
Its forecast assumes that the
country’s gross domestic product, which is the amount of goods and
services produced locally, would grow at the low-end of the
government’s target of 6.1 percent this year and 6.4 percent next
year.
Apart from GDP growth, the BSP
factored in its forecast for interest rates, crude oil prices, wage
increase and the foreign-exchange value of the peso.
The central bank assumed
overnight rates would remain constant at 7.5 percent from April this
year to December 2008.
For the benchmark 91-day Treasury
bill rate, which banks use in pricing their loans, the BSP assumes
it to average 4 percent this year and 5 percent next year.
It further assumes crude oil
prices averaging at $61.70 a barrel for this year and $65.22 a
barrel for next year.
Any increase in wages is assumed
at 5 percent come June and another 4 percent in 2008.
The BSP also forecast the peso to
hover between 48 and 50 against the dollar this year.
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