|
By Darwin G. Amojelar, Reporter
Surging food and oil prices
pushed the inflation rate in July to a 17-year high, exceeding the
central bank projection for that period, a government agency
reported Tuesday.
The National Statistics Office (NSO)
said inflation surged to 12.2 percent in July, above the forecast of
the Bangko Sentral ng Pilipinas (BSP) of between 11.2 percent and 12
percent. The July rate is the highest since the 13.1-percent rate
posted in December 1991. Inflation in July last year was only 2.6
percent.
The statistics office reported
that excluding select food and energy items, core inflation slipped
to 6.3 percent in July from 6.6 percent in June. The agency
attributed the increase in inflation to the higher petroleum
products particularly gasoline, diesel, liquefied petroleum gas
(LPG), rice, flour and transport fares.
George Worthington, chief economist
of Asia-Pacific IFR Markets earlier told The Manila Times that
inflation would likely surge to 12.2 percent in July, driven by
soaring prices of food and services. “I expect inflation to remain
in double digits through the second half of the year and into 2009.
At this point I have forecast a peak for this year of 14 percent in
October.”
The central bank predicted that
inflation would peak at 12 percent in October and slow down in the
fourth quarter. For next year, the central bank projected inflation
to decline—ranging from 6 percent to 8 percent—on account of the
recent increase in its key interest rates.
Prices of food alone climbed to
18.6 percent in July from 17.4 percent in June. The National
Statistics Office said higher prices was seen in rice at 50 percent
in July from 43 percent in June; corn, 40.6 percent from 34.3
percent; cereal preparations, 17.6 percent from 16.6 percent; fruits
and vegetables, 13.8 percent from 12.5 percent; and miscellaneous
foods, 8.9 percent from 8.3 percent.
On the other hand, upward price
movement was slower in dairy products at 13.1 percent from 13.5
percent; eggs, 6 percent from 7.5 percent; fish, 8.5 percent from
10.8 percent; and meat, 11 percent from 11.4 percent.
“The fish scare brought about
by the MV Princess of the Stars tragedy resulted in low consumer
demand of selected fresh fish species,” the statistics office
reported.
Thus, prices of fish in the three
areas went down in July to minus 1.9 percent from 0.9 percent,
according to the statistics office. Inflation for fuel, light and
water slowed to 5.5 percent in July from 7.6 percent in June.
Meanwhile, prices for all the
commodity groups further moved up at higher rates. Prices for food,
beverages and tobacco increased to 17.8 percent in July from 16.5
percent in June; clothing, 4.5 percent from 4.2 percent; housing and
repairs, 4.6 percent from 4.3 percent; services, 12.4 percent from
9.9 percent; and miscellaneous items, 3 percent from 2.9 percent.
The National Statistics Office
added that the prices in Metro Manila slowed down to 8.6 percent in
July from 9.2 percent in June because of lower annual rate posted in
the fuel, light and water index.
“The slower annual inflation
rate for food, beverages and tobacco index also contributed to the
downtrend. The rest of the commodity groups either remained at its
last month’s rate or moved up at higher rates,” the agency
added.
Outside Metro Manila, prices
further accelerated to 13.9 percent in July from 12.3 percent in
June, as all commodity groups continued to record higher annual
inflation rates.
Worthington also projected that
more policy rate hikes would be forthcoming if the central bank is
serious about getting control of inflation.
“After being very quick to cut
rates last year in one big go [175 basis points in July], they have
been very slow to lift them, just 75 bp [basis points] this year
despite inflation rising from 4 percent at the end of 2007 to three
times that now,” Worthington said.
He also expects the Monetary
Board to increase by another 50 basis points this month.
“Real interest rates [which is
actual interest rate less inflation] are sharply negative, providing
a big monetary boost to the economy that it does not need at this
point,” he added.
Earlier, the policy-making
Monetary Board raised its key policy rates by 75 basis points to
5.75 percent and 7.75 percent for the overnight borrowing and
lending rates, respectively.
|
