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By Chino S. Leyco, Reporter
CONSUMER price increases this month may have
averaged higher near the double-digit mark, the Bangko Sentral ng
Pilipinas (BSP) warned Friday.
It blamed the likely up tick on higher oil
prices and a transport fare hike.
BSP Governor Amando M. Tetangco Jr. said May
inflation is likely to have fallen within a range of 8.8 percent to
9.6 percent on the back of the surge in international oil prices,
climbing domestic pump prices as well as the provisional increase in
transport fares.
“These supply shocks are also expected to
affect food prices particularly those of rice, meat, fruits and
vegetables and other miscellaneous food items. These continue to be
the most important factors behind the expected higher inflation this
month,” Tetangco told reporters in a text message.
He said the rapid depreciation of the peso may
also have added pressure on consumer prices.
The peso has suffered a second week of decline
against the dollar due to concerns over rising oil prices.
“As I have said before, we will remain
vigilant and act preemptively once we see signs that our inflation
outlook for 2009 is at risk and inflation expectations are being
disanchored,” Tetangco said.
Inflation last month accelerated to a three-year
high of 8.3 percent.
The BSP had been caught in a dilemma in recent
months, as higher inflation forced it to halt an earlier monetary
loosening tack it had pursued to cushion any adverse impact from the
contraction in the Philippines’ largest export market, the US.
Some quarters had said that rising inflation
caught off-guard the central bank, which previously had been cutting
interest rates in lock-step with its US counterpart, the Federal
Reserve.
The domestic economy’s weaker-than-expected
expansion in the first quarter however gave the BSP some relief.
The National Statistical Coordination Board
announced Thursday that the country’s economy, as measured by its
gross domestic product (GDP), grew at a slower pace of 5.2 percent,
its weakest since 2006 due to rising food and oil prices.
Tetangco said the slowdown will lessen the
inflationary pressures, as the headline rate is seen to remain high
until September.
The country’s economic managers earlier
slashed their full-year GDP growth forecast to between 5.2 percent
and 6.2 percent, lower than an earlier target range of 6.3 percent
to 7 percent. Last year, the economy grew by a revised 7.2 percent.
Despite the new-found relief from the Philippine
economy’s first-quarter upset, Tetangco said there are other
factors that monetary authorities have to consider in setting
policy, including second round price pressures associated with
volatile oil and non oil commodity prices.
The Monetary Board is scheduled to meet next
week to decide whether to raise, cut or maintain the current
overnight borrowing and lending rates at 5 percent and 7 percent,
respectively.
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