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By Maricel E. Burgonio, Reporter
THE Bangko Sentral ng Pilipinas (BSP) said it
may be difficult to attain its inflation target for this year given
skyrocketing oil prices.
BSP Gov. Amando M. Tetangco Jr. said the recent
volatility in fuel prices is making it difficult for the central
bank to forecast inflation.
He said the average rise in prices this year may
surpass the BSP’s target of between 3 percent and 5 percent.
“Inflation rate is even more difficult to pin
down. It is difficult to forecast because of the recent developments
in oil prices. We can’t do anything with that. But it looks like
food has stabilized,” Tetangco told reporters.
He expects inflation to remain high until the
third quarter of the year and to decline in the fourth quarter as
the US economy is seen to begin its recovery from the impact of the
subprime mortgage crisis. Inflation rose to a three year high of 8.4
percent last month from 6.4 percent in March due to high oil and
commodity prices, which may slow down the country’s economic
expansion.
BSP simulations showed that the country’s
gross domestic product (GDP) could grow 6 percent this year if Dubai
crude will average $125 per barrel this year. This is lower than the
government GDP growth forecast of 6.1 percent to 6.7 percent this
year.
Despite exceeding this year’s target,
inflation would still stay within the BSP’s goal of between 4
percent and 5 percent next year, Tetangco said, despite the
market’s perception that oil prices would stay at the $134 a
barrel level five years going forward.
In any event, Tetangco said the country has
sufficient funds for oil importation, citing its balance of payments
surplus. The country’s dollar surplus rose to $499 million last
month from $378 million in March. For the first four months, the
surplus reached $2.134 billion.
The BSP forecast the country’s dollar surplus
to reach $3.4 billion this year from $8.576 billion last year.
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