PRICES of goods and services in the Philippines have entered a “turbulent” level and inflation will likely spike up to nine percent before pulling back within the 4-percent to 4.5-percent range.

This will likely happen within two years from now, according to economists from foreign banks in the country.

Soaring food prices pushed domestic inflation to 8.3 percent in April from 6.4 percent in March. This is the highest rate recorded in three years since inflation hit 8.5 percent in May 2005.

The rate in April exceeded central-bank expectations of 6.4 percent to 7 percent.

Wick Veloso, treasurer and head of global markets of Hongkong and Shanghai Banking Corp. said inflation in the next few months is expected to be unstable and may rise to 9 percent to 9.5 percent. 

“Inflation is temporarily moving up, but it is part of a business cycle. Business cycles come through and through. We’ll be seeing rising interest rates due to the prices of oil and commodities,” Veloso said.

“Inflation in the next few months [is going] to be unstable, possibly reaching 9 percent to 9.5 percent. Right now, it is on a degree of turbulence but it is expected to go back to the 4-percent to 5-percent range within the two-year band,” he added.

Standard Chartered Bank regional economist Simon Wong said rising oil and commodity prices is expected to keep inflation within the current level in the second quarter.

Standard Chartered expects inflation to average 8.1 percent in the second quarter and gradually ease to an average of 6.2 percent before the end of 2008, and then drop to 4.10 percent in the first half of 2009.

“While the [Philippine] economy is headed for a slower growth [this year], with higher inflation [rates] in the coming months, it is more resilient to bear the brunt of a slowdown,” Wong said.

The economy grew 7.3 percent last year. Standard Chartered projects the economy to grow 4.1 percent this year and 4.4 percent in 2009. Bulk of the growth is expected to come from strong consumer spending and dollar remittances from Filipinos overseas.

THE GOVERNMENT may have had enough of accredited government securities dealers that, for the past five months, have displayed a stingy attitude when it comes to their money.

PRICES of goods and services in the Philippines have entered a “turbulent” level and inflation will likely spike up to nine percent before pulling back within the 4-percent to 4.5-percent range.

THE peso closed little changed yesterday on prevailing oil and inflation concerns, currency traders said.

BRITISH lender Standard Chartered Bank is tapping the lending and deposit market of small and medium enterprises, or SMEs, as the sector makes a “big contribution” to the economy.

IF the forecast by Standard Chartered Bank on inflation this year is any indication, prices—not growth—preoccupy the banks’ minds the most.