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INFLATION is seen to hit hardest this year from the
third quarter, when the rise to the three-year-record
8.3 percent in April could be topped, on expectations
that food and fuel prices would reach their highest
levels.
The
Bangko Sentral ng Pilipinas (BSP) made this forecast
over the weekend, with Governor Amando Tetangco Jr.
saying the outlook on inflation this year was “too
fluid” at this point because only a few of the regional
wage boards have decided on the petitions for wage
increases that range from P80 to P125 a day.
They
remain optimistic the wage boards would grant
noninflationary wage hikes “within expectations,” he
added.
This
means an average wage hike not larger than 7 percent
from previous, or up to P25 per day, based on earlier
BSP calculations.
Tetangco
noted the wage board in Metro Manila granted only a
5-percent wage hike, or P20 a day, lower than the
bank-calculated threshold of P27 a day. “As long as
these wage increases were not overdone, we should be
okay,” said Tetangco, but added the peak could still
prove higher than forecast due to both food and oil
prices continuing to move up.
The
8.3-percent inflation rate in April already represented
a three-year high that brought this year’s four-month
average to 6.2 percent.
Tetangco
said, however, the inflation outlook for 2009 is still
very much within the 18- to 24-month policy horizon and
continues to be benign.
The
forecast inflation over the policy horizon had taken
into account the 50-centavo provisional fare increase
announced over the weekend by the Land Transportation
and Franchising Regulatory Board, he added.
Diwa
Guinigundo, the deputy governor, said simulations show
inflation likely peaking in the third quarter this year
consistent with the forecast hump-shaped profile seen
earlier.
But he,
too, said its peak could prove higher than originally
seen because of continued price surges in both food and
oil prices.
Even
with higher-than-forecast inflation, other macroeconomic
indicators such as the exchange rate remain in the
country’s favor, allowing exports to remain competitive
with the rest of the region.
Guinigundo said their inflation model continues to
predict that inflation in 2009 was still within the
target. “We are far from the red line.” |
