BSP hikes inflation forecast

MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has raised its inflation forecast to 4.7 percent instead of four percent this year due to higher food, commodity and utility prices.

BSP Assistant Governor Maria Cyd Tuano Amador told reporters that the policy-making Monetary Board has revised upwards its inflation forecast after factoring in the eight month-high inflation figure recorded last December.

“Since we updated our inflation number, the inflation forecast for 2010 increased but is still within target,” Amador stressed.

She pointed out that the BSP has set an inflation target of between 3.5 percent and 5.5 percent this year as well as three percent and five percent next year.

According to her, the BSP took into consideration the 4.4 percent inflation booked in December as well as the projected increase in utility rates including both power and water.

“Inflation is still manageable and benign,” Amador said.

For the month of January alone, the central bank sees inflation kicking up to a range of 4.5 percent to 5.4 percent from 4.4 percent last month due to higher oil and food prices.

However, BSP Governor Amando Tetangco Jr. earlier said inflation would still fall within the central bank forecast of 3.5 percent to 5.5 percent this year.

The BSP chief said the projected uptick could be attributed to increases in prices of selected food items such as rice and sugar, as well as the rates for utilities and the domestic pump prices of oil.

The National Statistics Office (NSO) reported that inflation eased to 3.2 percent in 2009 from 9.3 percent in 2008 amid the stimulus program adopted by fiscal and monetary authorities.

Inflation steadily dropped to a 20-year low of 0.1 percent in August before climbing for the fourth straight month in December at 4.4 percent. Last month’s inflation was the highest since April 2009 when inflation averaged 4.8 percent. –Lawrence Agcaoili (The Philippine Star)