|
By Maricel E. Burgonio, Reporter
DESPITE record inflation, consumer price increases are likely to
ease early next year.
The Bangko Sentral ng Pilipinas (BSP) said
inflation would return to single-digit levels before the forecast of
March or April next year.
“If oil prices continue at $80 per barrel, we
might see single digit inflation coming earlier than March,” BSP
Deputy Governor Diwa Guinigundo said.
He said Dubai crude, the benchmark for prices of
local oil products, declined to $82 a barrel, down from a high of
$130 a barrel in July.
Guinigundo said the BSP has flexibility to
fiddle with its interest rates in case the softening of oil prices
continues until the end of the year.
Separately, Nomura Securities said the return to
normal levels of rice prices in the world market after favorable
weather conditions in Asia would also limit Philippine inflation.
“Rice prices will trend south in the latter
half of 2008, as there is a strong likelihood of bountiful rice
harvest in India, Thailand and Vietnam due to stable weather,”
Yuichi Izumi, Nomura Securities economist, said.
From a peak of $1,040 a metric ton in mid-June,
the benchmark export price of Thailand’s pure grade-B long grain
rice has fallen by 30 percent to $710 a metric ton in July.
In the local scene, the Department of
Agriculture data showed that retail prices of the country’s staple
have begun to trek south from the recent record highs.
For next year, Nomura estimates that Philippine
inflation would average at 6.7 percent from this year’s new
estimate of 9.7 percent. Earlier, the Japanese firm forecast
consumer price increases would average 7.8 percent.
The upward adjustment on this year’s
inflation, Izumi said, was due to the rise in crude oil and grains
prices during the first semester.
Both Nomura’s inflation forecasts for this
year and 2009 are in line with the Development and Budget
Coordinating Committee’s forecast of 9 percent to 11 percent and 6
percent to 8 percent, respectively.
Inflation accelerated to a 17-year high of 12.5
percent last month, with the eight-month average hitting 8.8
percent, or well above the official target of 3 percent to 5
percent.
The BSP had said that inflation would peak this
month or next. It has increased rates by 100 basis points so far
this year, with its overnight borrowing and lending rates at 6
percent and 8 percent, respectively.
“The demand condition of the economy continues
to be buoyant which means that the absorptive capacity of the
economy is such that it can absorb increases in the policy rates
without necessarily pulling up the rest of the market rates,”
Guinigundo said, referring to continued lending growth despite
higher interest rates.
The BSP reported that bank lending grew 24.2
percent year-on-year to P2.015 trillion in the first half of this
year. This was driven by the expansion in credit demand by consumers
as well as by the wholesale and retail trade sector, and the
electricity, gas and transport and communication industries.
Bank lending growth was also supported by ample
liquidity in the system, with the demand for money growing 5.1
percent in June from 3.7 percent in May.
-- With Chino S. Leyco
|
