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Consumer prices in June are likely to rise to double digits, pushed
by costlier food and fuel, an official of the National Economic and
Development Authority said.
Augusto Santos, the acting Socioeconomic
Planning secretary, on Monday projected inflation to grow 10 percent
this month from 9.6 percent in May.
“We may hit double-digit [inflation this June]
mainly because of rising food and oil prices,” Santos told
reporters. He predicted, though, that prices will ease starting next
year.
In July, prices of canned goods are expected to
increase again as a result of soaring price of tinplate and tight
demand for it in the world market.
Last week, the Department of Trade and Industry
asked canned-goods manufacturers to explain the P2 price increase in
their products. The manufacturers had cited rising cost of tinplate.
Henry Tanedo, president of the Tin Can Makers
Association of the Philippines Inc., also on Monday said world price
of tinplate would cause prices of tin cans to climb up by 12 percent
to 15 percent next month.
At present, tinplate costs $1,350 per metric
ton, compared with $1,128 per metric ton last year.
Tanedo said his group has frozen tinplate price
for four years.
“But definitely, we cannot sell below cost
[this time],” he added.
Tanedo, though, assured that his group, will
only set a “very minimal” increase in the prices of tin cans.
Tinplate, he said, takes up 70 percent of the
cost to produce a tin can.
In Asia, Tanedo added, price of tinplate has
increased by 32 percent and iron ore, the main component of
tinplate, by 80 to 100 percent.
The May inflation was primarily triggered by
unabated price increases in the heavily weighted food, beverages and
tobacco index. A year ago, the inflation rate was 2.4 percent.
Prices for food, beverage and tobacco surged to
13.7 percent in May from 11.4 percent in April; clothing, 4 percent
from 3.9 percent; house and repairs, 4 percent from 3.8 percent;
fuel, light and water, 8.2 percent from 8 percent; services, 7.8
percent from 6.9 percent; and miscellaneous items, 2.7 percent from
2.6 percent.
For food alone, the country’s annual inflation
rate was up to 14.3 percent in May from 12 percent in April.
From January to May, the inflation rate rose 6.9
percent, higher compared to targets of the Development Budget and
Coordinating Committee of between 3 percent and 5 percent in 2008.
The Bangko Sentral ng Pilipinas also projected
that inflation could reach 11 percent in June before dropping
continuously starting July.
With the higher-than-expected inflation, the
policy-making Monetary Board was forced to hike its key interest
rates by 25 basis points to 5.25 percent for the overnight-borrowing
window and 7.25 percent for the lending window.
The central bank also raised its inflation
forecast to between 7 percent and 9 percent this year, and to
between 4 percent and 6 percent next year. It earlier set a
3-percent to 5-percent inflation target for this year.
Santos said first-quarter inflation rates in
other Asian countries were also on the high side at 7.6 percent in
Indonesia; 4.99 percent, Thailand; 6.59 percent, Singapore; 3.7
percent, South Korea; 5.16 percent, China; 16.4 percent, Vietnam;
and 2.5 percent, Malaysia.
In the Philippines, the first-quarter figure
stood at 5.6 percent.
-- Darwin G. Amojelar and Katrina Mennen A. Valdez
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