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By Maricel E. Burgonio, Reporter
The uptick in inflation rate is
expected to continue because of high oil and commodity prices, but
may fall within the central bank’s target, Bangko Sentral ng
Pilipinas (BSP) announced Thursday.
However, inflation or increase in
prices is projected to decelerate in the second half of the year.
BSP Governor Amando Tetangco Jr.
said the BSP is still reviewing its inflation forecast, particularly
the impact of high oil prices and commodity prices.
“The forecasts are being
reviewed but the most recent runs show that the hump could extend
because of higher oil and commodity prices. Nonetheless, we will
still be within the 2009 target,” Tetangco Jr. told reporters.
The BSP has set an inflation
target of 3 percent to 5 percent this year and 2.5 percent to 4.5
percent next year.
In the meantime, as prices go up,
the peso slides further owing to risk aversion to emerging markets,
traders said.
At the
Philippine Dealing System, peso closed to P41.840 on Thursday from
P41.730 on Wednesday.
“The depreciation of the peso
was still due to risk aversion. Investors have no interest to invest
in the emerging markets stocks and bonds as they invest more in a
safer haven like the US treasury,” Marcelo Ayes, Rizal Commercial
Banking Corp. vice-president, said.
Peso opened at P41.780 and traded
to a high of P41.845 and low of P41.750. Total volume turnover
reached $677.5 million.
“The currencies in the emerging
market are slightly weak because of continued concern over expected
aggressive cut in the Fed rate as the US economy is expected to
slide,” Ayes said.
However, peso is expected to
improve next week due to high remittance inflows.
Traders said remittance season is
approaching in time for school enrollment expenses.
Peso is expected to range up to
P40.80 next week, traders projected. It can also test to a high of
P42.10.
Some of the bank analysts expect
peso to further improve in the third quarter and end the year at
P37.50 as the government sustains good fiscal position.
Meanwhile, the National
Statistics Office had reported that inflation rose to 5.4 percent
year-on-year in February from 4.9 percent in January, bringing the
year-to-date average to 5.1 percent.
BSP said the uptick arose from
higher prices of rice, fruits and vegetables, fish, miscellaneous
food, meat, rentals, transportation and communication services,
fuel, educational services, dairy products, and cereal products.
Moreover, base effects due to
low-price levels in 2007 led to high inflation rates for fruits and
vegetables and petroleum products despite price decreases
month-on-month.
Food prices, as the biggest
component in inflation, would increase with the perceived rice
crisis in the country.
However, President Gloria Arroyo
earlier assured the public of rice sufficiency and the
government’s capability to meet the food requirements of
consumers.
The Department of Agriculture
earlier said that rice shortage is concentrated in areas hit by
floods or droughts. It also had acknowledged that some crooked rice
traders are repacking cheap rice from the National Food Authority
and are selling it as commercial rice.
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