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By Chino S. Leyco and Darwin G.
Amojelar Reporters
THE Bangko Sentral ng Pilipinas (BSP)
expects price increases to accelerate in the first six months of the year to the high-end of its target range.
BSP Governor Amando M. Tetangco
Jr., said the monthly inflation rate in January to June would rise
close to 5 percent, but the average for the year would still fall
within its forecast of 4 percent, plus or minus one percentage
point.
“With current forecasts showing
that sometime during the first half of the year, the monthly
inflation rate would rise to around the top end of the target range
for this year,” Tetangco told reporters.
“We continue to monitor
developments in the movers of inflation such as domestic demand
pressures, any rise in domestic liquidity from more [foreign
exchange] inflows, volatility in oil prices as well as any
second-round effects from these,” he added.
Last month, consumer prices rose
at their fastest pace in 15 months to 4.9 percent, accelerating from
last December’s 3.9 percent. The January rate likewise breached
the high-end of the BSP’s forecast of between 3.7 and 4.4 percent.
Tetangco said the acceleration
was due to the increase in prices of basic food items, as well as
water and power rates.
“In general, we are seeing the
impact of the onset of lean months in agriculture products and hikes
in power and water rates. Base effects are becoming manifest. The
monetary authorities will continue to asses latest price
developments and pitch policy to [the] corresponding inflation
outlook and balance of risks,” he said.
In a separate briefing, Cielito
F. Habito, a former socioeconomic planning secretary, said inflation
this year could range from four to five percent.
Habito, who heads the Ateneo
Center for Economic Research and Development (ACERD), said the
Philippine economy would grow within the government’s forecast,
but warned that joblessness would remain high.
At its Eagle Watch forum, ACERD
said the country’s gross domestic product (GDP), would grow
between 6.2 and 7.2 percent, close to the 6.3 to 7 percent official
target range.
The economy grew 7.3
percent in 2007, the fastest pace in more than a three decades.
“[A] repeat in 2008 [is]
unlikely due to global and US slowdown and [weak] revenue
performance,” Habito said.
The group based its 2008
projections on surging overseas remittances, higher consumption
spending, lower inflation, and private and government infrastructure
spending.
Habito, however, said that
falling imports, exports, the appreciation of the peso, weaker tax
revenues, and an oil price hike could negatively impact the domestic
economy.
The former socioeconomic
planning secretary sees unemployment to range from 7.5 to 8 percent.
As of October last year, 2.2
million Filipinos were jobless or 6.3 percent of the total labor
force. This was lower than the 7.3 percent jobless rate in the same
period in 2006.
Leonardo A. Lanzona, economics
professor also at the Ateneo, said the unemployment rate has been
reduced significantly but only because labor force participation is
lower.
The National Statistics
Office reported that there were 35.9 million persons in the labor
force last October.
“The job creation has
been lackluster. Agriculture showed some slight increase in jobs,
but other sectors except for construction has only increased
marginally,” Lanzona said.
He said the quality of work
has not improved, with most of the occupations found in the
unskilled category.
“Workers have not
benefited much from the recent economic growth, hence placing doubts
on the sustainability of the present situation. The struggle for
jobs and stability remains,” he added.
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