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Wednesday May 7, 2:08 PM
Record Philippine Prices Bring April Inflation to 8.3%: OFFICIAL MANILA, May 7 Asia Pulse - Skyrocketing prices of oil and non-oil commodities brought the April 2008 inflation to 35-month high rate of 8.3 per cent, government reported Tuesday.
The last time the country's inflation rate reached the eight per cent level was in May 2005, data from the National Statistics Office (NSO) said. Relatively, core inflation for the month stood at 5.9 per cent from month-ago's 4.8 per cent, bringing the year-to-date average to 4.5 per cent. Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. attributed the further rise of inflation to increases in all commodity groups in the basket." He explained that the continued uptick was as projected, although the magnitude was higher than expected. The elevated prices of oil and non-oil goods continue to pose challenges for policymakers, although for some commodities, supply responses, i.e. higher production, should eventually temper the price spikes, he added. Price of oil in the world market remains over $100 per barrel while price of rice in particular is already above $1,000 per metric ton (MT). This development resulted in the price increases in the local market with rice, the staple food in the country, going up to at least P30 a kilo for the commercial rice from the previous P20 level. Tetangco noted that as base effects dissipate and as measure to stabilize supply take root, we remain convinced that price movements will revert to manageable levels over the policy horizon. "We will, however, continue to closely monitor developments for any second round pricing pressures and will act decisively to ensure that inflation expectations would remain well anchored," he stressed. Central bank officials earlier said they are wary of any effects of a fare and wage hike as labor groups have asked for increase in their salary while transportation groups also doing the same for their sector. BSP officials said they have assumed a P25 wage increase for this year, as what has normally been approved in the previous years, but amount more than this will have greater impact on the governments inflation target. For this year, the government targets inflation between a range of three to five per cent, which monetary officials said face risks due to the economic situation in the world economy. However, they are confident that the 2.5 per cent to 4.5 per cent target for 2009 is achievable. (PNA)
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