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By Maricel E. Burgonio, Reporter
A STRONG peso and cheaper fuel
may have allowed consumer price increases to ease further in
January, according to the Bangko Sentral ng Pilipinas (BSP).
BSP Governor Amando M. Tetangco
Jr. said inflation this month may range from 3.9 percent to 4.6
percent.
“The actual rate may be
slightly lower than December considering the strengthening of the
peso and the generally lower retail prices of domestic petroleum
prices,” Tetangco told reporters.
The interagency Development and
Budget Coordinating Committee (DBCC) forecast inflation this year to
range from 3.3 percent to 3.8 percent given the declining price of
Dubai oil and strong peso. This is below the government’s
inflation target of 4 percent to 5 percent. The DBCC projects Dubai
oil price to range from $61 to $64 a barrel, while the dollar is
assumed to cost from P48 to P50 this year.
BSP Deputy Governor Diwa C.
Guinigundo earlier said inflation would reach the lower end of the
government’s target provided that the surge in domestic liquidity
would not be excessive.
Demand for money continued to
grow in November as domestic liquidity accelerated to 18.5 percent
year on year from 16.1 percent in October. The expansion in
liquidity continued to be driven by strong foreign-exchange inflows
from overseas Filipino workers remittances, portfolio and direct
investments.
The BSP said other risks to the
inflation outlook include imminent increases in public expenditure
associated with the May midterm election and potential shifts in the
public’s inflation expectations.
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