Consumer prices in July might fall, BSP says

The prices of goods could have decelerated to as low as negative 0.3 percent in July after the rate of increase in June consumer prices slowed down in more than two decades, Bangko Sentral ng Pilipinas (BSP) governor Amando M. Tetangco Jr. said. Should deflation - the decline in prices cause by decreased spending by government, investment, or personal - happens, he said this would “simply be the result of prices normalizing from spikes last year" although inflation could be as high as 0.6 percent during the month. “The low inflation numbers for July are being driven mainly by base effects of the high commodity prices during the same month in 2008. In particular, the global prices of petroleum products peaked in July 2008, with Dubai crude reaching around $140 a barrel," he said in a text message. However, Tetangco said the decline in prices would unlikely continue as this would lead to higher unemployment and financial downturn. The BSP sees inflation this year at 2.5 percent to 4.5 percent although it already hit an average of five percent during the first semester. -GMANews.TV