BSP lowers inflation forecast for 2012, ‘13
Monday, 23 January 2012 00:00
THE Bangko Sentral ng Pilipinas (BSP) has lowered its inflation forecast for this and next year mainly due to lower inflation rate in December last year. The 2012 forecast was slashed to 3.1 percent from 3.51 percent last December while the 2013 forecast is now at 3.4 percent from 3.12 percent previously. "The major reason is the December (2011) figure...It was much less than what was expected," BSP Deputy Governor Diwa Guinigundo said. Monetary offi cials projected that rate of price increases in the last month of last year will stay within four to 4.9 percent. Actual inflation stood at four percent bringing the average in the 12 months of last year to 4.4 percent. Infl ation last month was lower than the previous month's 4.7 percent while the December 2010 inflation rate stood at 3.1 percent.
The inflation target for this year until 2014 is a range between three and five percent. Guinigundo said "there was a slight adjustment" for the 2013 forecast due to upside risk to inflation like hike in oil prices as well as possible increase in power rates. He said that the Philippine Power Sector Assets and Liabilities Management (PSALM), National Power Corp. (NAPOCOR) and the National Grid Corp. had pending petitions for power rate increase. "If those three outstanding petitions do materialize then they will also affect probably parts of 2012 and 2013," he said. The central bank official also cited second round effects as "very daunting" risks to inflation this year and the next. He said oil price hikes would also increase transport cost and impact on wages. PNA
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