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DESPITE high oil prices, the Bangko Sentral ng
Pilipinas expects the average increase in consumer prices in
September to remain benign.
Bangko Sentral Gov. Amando M.
Tetangco Jr. said inflation is forecast to average between 2.1 percent
and 2.8 percent this month, from 2.4 percent in August.
Tetangco said a strong peso and
the decline in the prices of fresh food items may have contributed
to the benign inflation outlook.
“While prices of major food
items, such as rice and fuel, rose during the month, prices of fresh
food items declined and the peso remained generally firm. Overall,
the inflation environment continues to be favorable,” he told
reporters.
Last August, headline inflation
slowed to 2.4 percent year-on-year from 2.6 percent the previous
month, with lower inflation rates recorded for all commodity groups
except clothing. Average inflation was maintained at 2.6 percent in
the first eight months.
For this year, the central bank
has set an inflation forecast of 2.6 percent to 3.1 percent, way
below the target of 4 percent to 5 percent.
Inflation has remained low
despite strong economic growth, which averaged7.3 percent
in the first half of the year.
Domestic liquidity growth is also
seen to remain below 20 percent after it peaked to 26 percent last
April.
However, risks to future
inflation remain such as increases in transport costs and wage hike
petitions. The movement in international oil prices is another risk
factor in central bank’s inflation forecast.
Dubai crude, the benchmark for
local oil prices, averaged $63 a barrel, thus poised to exceed the
Development and Budget Coordinating Committee’s forecast of $61
to $64 per barrel this year.
--Maricel E. Burgonio
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