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By Darwin G. Amojelar, Reporter
Rising food and fuel prices pushed the
country’s inflation to a 14-year high of 11.4 percent in June,
exceeding the forecast by Bangko Sentral ng Pilipinas (BSP) earlier
this week.
The National Statistics Office reported on
Friday that inflation rate surged in June from 2.3 percent during
the same period last year. The agency said last month’s rate was
the highest since May 1994, when inflation was 11.5 percent.
In May 2008, inflation was 9.5 percent.
Earlier this week, the central bank projected
that inflation in June could grow between 10.4 percent and 11.2
percent. Central Bank Gov. Amando Tetangco Jr. said the inflation
will peak in the third quarter but will likely go back to
single-digit levels next year.
From January to June, inflation rose 7.6
percent, still within the central bank target of 7.9 percent for
2008.
“The soaring prices of rice nationwide along
with the upward adjustments of other food items—such as flour and
flour products, fruits and vegetables and meat in selected
regions—pushed the month-on-month inflation rate,” the National
Statistics Office said.
The agency added that the prices of gasoline and
diesel continued to soar during the month. “Tuition fee hikes,
increments in the prices of school supplies, textbooks and
medicines, increased transport fares and higher charges for personal
services in many regions were also observed,” it added.
The statistics office said all the commodity
groups continued to post higher year-on-year inflation rates except
for the fuel, light and water index, whose annual growth rate was
slower at 7.6 percent in June from 8.2 percent in May.
Annual inflation for food, beverages and tobacco
picked up to 16.5 percent in June from 13.6 percent in May;
clothing, 4.2 percent from 4 percent; housing and repairs, 4.3
percent from 4 percent; services, 9.9 percent from 7.8 percent; and
miscellaneous items, 2.9 percent from 2.7 percent.
Prices for food alone rose to 17.4 percent in
June from 14.2 percent in May.
Annual inflation of rice was higher at 43
percent in June from 31.3 percent in May; corn, 34.3 percent from
27.1 percent; cereal preparations, 16.6 percent from 15.3 percent;
fish, 10.8 percent from 9.6 percent; fruits and vegetables, 12.5
percent from 10.1 percent; meat, 11.4 percent from 10.4 percent; and
miscellaneous foods, 8.3 percent from 7.6 percent.
The Philippines is one of the world’s biggest
rice importers and has been hit hard by a worldwide rise in prices.
But slower annual price adjustments were
correspondingly seen in dairy products and eggs at 13.5 percent and
7.5 percent from 13.7 percent and 7.7 percent, respectively.
Prices in Metro Manila jumped by 0.9 percentage
point, to 9.2 percent in June from 8.3 percent in May, brought about
by the higher annual price increases in all the commodity groups
except for clothing and food, light and water.
In areas outside the National Capital Region,
annual inflation rose to 12.3 percent in June. All the commodity
groups posted higher annual inflation rates last month. In May, the
inflation rate for the area was 10.1 percent.
Tighter monetary policy
Tetangco signaled the monetary authority’s
plan to tighten monetary policy.
“While inflation continues to be influenced by
supply-side pressures, there are indications that such pressures
have started to feed into demand, with core inflation steadily
rising since December 2007,” Tetangco said in a statement.
“Monetary authorities have acted last month to
address risks to inflation, and they stand ready to adjust monetary
policy settings further as and when necessary to achieve the price
stability objective,” he added.
The central bank began tightening its key
interest rates last month, for the first time since 2005, after the
May inflation figure spiked at a readjusted rate of 9.5 percent.
The overnight borrowing rate rose to 5.25
percent while the overnight lending rate was increased to 7.25
percent, both by 25 basis points.
-- With AFP
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