Inflation may rise to 5.1 percent this month

Inflation could rise to 5.1 percent this month, from 4.4 percent in April, because of Europe's debt crisis and the growing tension between the two Koreas, central bank Gov. Amando Tetangco Jr. told reporters Wednesday. This would be the first time in months that inflation would register above 5 percent after it was recorded at 6.4 percent in March 2009. "May 2010 inflation is forecast to tip within the band of 4.2 percent to 5.1 percent," Tetangco said, noting that the forecast range indicates the full-year average would still fall within the target for 2010. "Nevertheless we are watchful of developments in the other markets, including Europe and Korea, particularly shifts in investor sentiment and their impact on the movements of international commodity prices and exchange rates in the major economies," Tetangco said. "This will be part of our deliberation during our policy meeting next [June 3]," the BSP chief added. Inflation this year is expected to range from 3.5 percent to 5.5 percent from 3.2 percent last year. The BSP said inflation will likely advance to a high of 6 percent next June or July with a possible wage increase, higher fares, and rising pump prices of petroleum products. —VS