Bangko Sentral, NEDA rule out wage-hike inflation

ECONOMIC managers on Tuesday doused fears that the latest wage hike order would fuel inflation.

The Bangko Sentral ng Pilipinas (BSP) said its baseline forecast of manageable inflation for this year and 2011 could likely hold despite the P22 increase in the minimum wage for Metro Manila.

BSP Governor Amando Tetangco Jr. said the policy-making Monetary Board already factored in a P25 increase for implementation in June for forecast purposes.

In a text message, Dennis Arroyo, director of the National Planning and Policy Staff of the National Economic and Development Authority agreed that no inflationary spell should be expected from the latest wage adjustment.

The latest wage order would increase the daily take home pay of workers at the capital region to P404 from the current P382.

Had the government approved a higher salary increase, Tetangco said its impact on the inflation outlook would still depend on the timing of implementation.

“If it’s, say, implemented in the second half, then the impact would be for just half of the year. So it’s both the amount and the timing. We review the forecast every meeting, if there will be a decision by the next meeting, then probably that will be factored into the new inflation forecast at that time,” he had said.

Last week, the BSP had revised its baseline inflation forecast to 5.1 percent from 4.64 percent this year and to 3.7 percent from 3.45 percent in 2011, assuming there would be no more than a P25 wage increase, a 50-centavo fare adjustment for jeepneys, a P10 adjustment in taxis’ flag down rate, and lower oil prices.

Jimmy Pesigan, chief of the Land Transportation and Franchising Regulatory Board said the agency has yet to set a public hearing in the next few weeks to decide on the petition to increase jeepney and taxi fares.

The Federation of Jeepney Operators and Drivers Association of the Philippines earlier filed a P0.50 fare hike, while taxi operators are asking for an additional P10 flag down rate. –Lailany P. Gomez and Darwin G. Amojelar, Manila Times