2010 inflation reaches 3.8% from 3.2% in 2009 — NSO

Inflation reached 3 percent in December last year, bringing the full-year average to 3.8 percent and within the central bank's target range of 3.5-5.5 percent, the National Statistics Office (NSO) said Wednesday. Average inflation in 2009 was 3.2 percent, government data showed. "The higher annual rates of price increases in food, beverage, and tobacco were offset by slower annual growth registered in fuel, electricity, and water," the NSO said in a statement. In particular, inflation pressures in December were traced to higher prices of fruits and vegetables and miscellaneous food items due to increased demand during the holiday season, the NSO said. This was offset by a decline in the cost of power from the wholesale electricity spot market and lower inflation rate for transportation and communication services, it added. As inflation last year was within target, the Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. need not write to President Aquino and explain why prices were unpredictable. The BSP charter mandates the central bank governor to write an open letter explaining why the actual inflation during preceding year was off-target. "The inflation turnout in December supports our assessment of a manageable inflation outlook over the policy horizon, of course, barring adverse price surprises," Tetangco said in a text message to reporters. Tetangco also said forecast inflation for 2011 and 2012 is within the target range of 3-5 percent. "The BSP will continue to monitor closely potential risks to the inflation outlook to ensure that such risks are addressed appropriately, while allowing the economy to sustain its growth momentum," he said. — JE/VS, GMANews.TV