BSP expecting prices to surge up to 5.5% in Feb

MANILA, Philippines- The Bangko Sentral ng Pilipinas on Friday said inflation for February could be as high as 5.5 percent, lowering the chances of another interest rate cut in the Monetary Board's upcoming policy meet. Consumer prices rose between 4.8 percent and 5.5 percent in February, the BSP said, as prices of rice, meat, corn and flour surged. However, BSP Gov. Amando M. Tetangco Jr. said this was partly offset by a slight decline in the prices of petroleum products after the reduction in tariffs on imported oil and oil products. Tetangco also noted a decrease in electricity rates across the country. Tetangco, also clarified that the price surge in February was not unexpected since the BSP has been projecting a hump in the inflation rate trajectory towards the middle part of the year. The uptick in prices lowers the chances of another interest rate cut at the MB's meeting next week as the BSP cited low inflation environment when it eased its policy in recent meetings. The BSP targets inflation to rest within 3 percent and 5 percent for the whole of 2008, but Tetangco has said that the movement of consumer prices on a monthly basis would not be level throughout the year. "We're not targeting inflation on a monthly basis. But current forecasts show that sometime during the first half of the year, the monthly inflation would rise to around the top end of the target range," Tetangco said. - GMANews.TV