Rise in consumer prices may pick up in December
12/22/2009 | 03:43 PM
The Bangko Sentral ng Pilipinas (BSP) expects a faster rise in consumer prices this month due to increased demand for certain food items.
In a text message, central bank Governor Amando M. Tetangco, Jr. said December inflation might rise to 3.7-4.6 percent also due to the continued rise in prices following damages brought by typhoons Ondoy and Pepeng.
“In terms of inflation forecast, indication is that we can meet our targets for 2009, 2010, and 2011. In fact for 2010 and 2011, we will be in the lower half of the target range for inflation, which would give us room to provide support to economic growth," he added.
Inflation is forecast to average 3.3 percent this year, well within the 2.5-4.5 percent target. It may hit 4 percent next year, or in the middle of the 3.5-5.5 percent goal. The central bank's inflation target for 2010 is 3-5 percent.
The BSP's main objective is to promote price stability, and it uses monetary policy — tweaking benchmark interest rates, among others — to control money supply.
While the central bank must ensure stable prices, it also tries to make sure that the economy does not suffer from the lack of money in the financial system.
Inflation has eased steadily since February until it hit a 20-year low of 0.1 percent in August. It climbed again for three straight months, hitting a six-month high of 2.8 percent in November.
Tetangco said the BSP has crafted a so-called exit strategy as countries start to recover from the global economic crunch, but it is waiting for the right time to execute the plan.
The central bank has said there was no pressure for the Monetary Board to tighten rates since prices remain stable.
Since December last year, the central bank has slashed its key policy rates by 200 basis points until July this year. This brought the overnight borrowing rate at a record low of 4 percent and the overnight lending rate at 6 percent, which it has kept so far.
Philippine economic output slowed to 0.7 percent in January to September from 4.2 percent a year earlier due to the global slump. — GMANews.TV
In a text message, central bank Governor Amando M. Tetangco, Jr. said December inflation might rise to 3.7-4.6 percent also due to the continued rise in prices following damages brought by typhoons Ondoy and Pepeng.
“In terms of inflation forecast, indication is that we can meet our targets for 2009, 2010, and 2011. In fact for 2010 and 2011, we will be in the lower half of the target range for inflation, which would give us room to provide support to economic growth," he added.
Inflation is forecast to average 3.3 percent this year, well within the 2.5-4.5 percent target. It may hit 4 percent next year, or in the middle of the 3.5-5.5 percent goal. The central bank's inflation target for 2010 is 3-5 percent.
The BSP's main objective is to promote price stability, and it uses monetary policy — tweaking benchmark interest rates, among others — to control money supply.
While the central bank must ensure stable prices, it also tries to make sure that the economy does not suffer from the lack of money in the financial system.
Inflation has eased steadily since February until it hit a 20-year low of 0.1 percent in August. It climbed again for three straight months, hitting a six-month high of 2.8 percent in November.
Tetangco said the BSP has crafted a so-called exit strategy as countries start to recover from the global economic crunch, but it is waiting for the right time to execute the plan.
The central bank has said there was no pressure for the Monetary Board to tighten rates since prices remain stable.
Since December last year, the central bank has slashed its key policy rates by 200 basis points until July this year. This brought the overnight borrowing rate at a record low of 4 percent and the overnight lending rate at 6 percent, which it has kept so far.
Philippine economic output slowed to 0.7 percent in January to September from 4.2 percent a year earlier due to the global slump. — GMANews.TV
