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By Maricel E. Burgonio,
Reporter
The Philippine central bank
forecasts that inflation will inch up in September, more bad news
after last month’s rate of a near 17-year high.
Bangko Sentral ng Pilipinas (BSP)
Governor Amando Tetangco Jr. predicted that inflation would reach
between 11.8 percent and 12.7 percent in September, according to a
statement released Tuesday.
Inflation in September last year
was only 2.7 percent.
Earlier in August, inflation
reached 12.5 percent, near the 17-year high of 13.1 percent.
Inflation is expected to peak
either in September or October but is not expected to reach 13
percent, the governor said.
“The actual figure could be
higher or lower than the August rate of 12.5 percent, depending on
whether the effects of the rainy season and the seasonal spike in
the demand for certain food items are stronger or weaker than the
impact of the increased availability of rice due to the early palay
[unhusked rice] harvest and the sustained National Food Authority [NFA]
rice distribution,” Tetangco said.
Inflation rate is projected to
post a moderate growth in September this year as world oil prices
continue to decline and the availability of rice in the market
continue to be sufficient, which would further lessen food prices,
according to the central bank statement.
The governor says the downtrend
in world oil prices may have helped temper inflation, though. Local
oil companies had been rolling back prices at the pump since July
31.
The massive infusion of National
Food Authority rice in the markets has brought down prices of
commercial rice. Food prices decelerated to 18.1 percent in August
from 18.6 percent in July because of slower price gains in rice at
45.1 percent in August from 50 percent in July.
“BSP will continue to monitor
developments in food and oil prices, as these remain the biggest
risks to our inflation outlook,” Tetangco said.
Tight monetary policy
The US-based think tank Global
Source said the underlying price pressures remain as core inflation,
excluding food and energy items, is still high based on its latest
report, which posted 7 percent in August and 6.3 percent in July.
Because of this, the market
expects Bangko Sentral to further increase its interest rates in the
next policy meeting on October 9.
“In light of the recent rally
in oil prices, the BSP is likely to keep a tight rein on policy rate
until there are clearer signs that inflation and inflationary
expectations are on the downhill,” Global Source said.
Bangko Sentral’s overnight
borrowing and lending rates rose by 100 basis points so far this
year that stood at 6 percent and 8 percent, respectively.
Beyond September
The central bank also said
inflation is likely to peak in September or October but would not go
beyond 13 percent.
The rate of increase in inflation
is expected to be moderate in the last quarter of the year but
expected to sustain in double-digit levels and return to
single-digit level in March or April next year.
Bangko Sentral has forecasted
inflation to reach 9 percent to 11 percent by the end of the year.
Year-to-date, inflation has averaged at 8.8 percent in January to
August this year.
Inflation is predicted to be
benign next year—between 6 percent and 8 percent next year—but
will remain high compared with the recorded 2.8 percent last year.
Meanwhile, the government’s
forecast in Dubai crude price, the benchmark for local oil prices,
is $ 115 per barrel to $125 per barrel for this year.
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