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THE
Bangko Sentral ng Pilipinas (BSP) projects inflation to
average still higher in April to around 7 percent,
significantly higher than the month-ago average of only
6.4 percent.
The
forecast was in recognition of higher oil and nonoil
commodity prices for the period marked by domestic, as
well as global, rice-supply stresses and the impact of
the power-rate adjustment.
“With
the continued increase in oil and nonoil commodity
prices, we expect April inflation to average from 6.4
percent to 7 percent,” he said in a text message.
Inflation has trended steadily upward since January when
it averaged 4.9 percent, to 5.4 percent the following
month and finally to 6.4 percent in March.
The
National Statistics Office (NSO) is due to release the
official inflation rate for the month by next week.
Tetangco also said the power-rate adjustment during the
month was similarly seen to impact on headline
inflation—which HSBC economist Frederic Neumann, for
instance, forecasts to average in the 8-percent range.
For this
reason, Tetangco vowed that monetary policy will remain
“vigilant for any early sign of second-round effects and
possible disanchoring of inflation expectations.”
He also
said the outlook for inflation this year is already
“clouded,” or one that is certain to breach the
government’s official target ranging from 3 percent up
to 5 percent.
Year-to-date inflation already averaged 5.57 percent
based on official government data.
But
while the BSP has practically given up on controlling
inflation within the official range for the year,
Tetangco remained optimistic that next year’s inflation
goal was still within reach.
“The
2008 inflation outlook is clouded with risks but the
2009 target of 3.5 percent plus or minus 1 percentage
point is achievable,” Tetangco said.
Under
the inflation-targeting framework embraced by the BSP
since January 2000, it is required to set an inflation
goal, and must explain to the President and to the
nation as a whole if that target is breached.
The BSP
managed to tame inflation last year, and it averaged
only 2.8 percent; but had to write an open letter to
President Arroyo in 2006 when inflation averaged above
target to 6.2 percent instead. |
