[ Manila Bulletin Online ] December 9, 2008
By LEE C. CHIPONGIAN
The Bangko Sentral ng Pilipinas (BSP) has finalized its inflation rate target of 4.5 percent plus-or-minus one percentage point for 2010, while forecast is 3.5-5.5 percent also in the same year.
This is lower than 2009’s forecast of 6-8 percent and from this year’s 9-11 percent projection range.
BSP said the inter-agency Development Budget Coordination Committee has approved the 2010 inflation target.
"Promoting price stability is the BSP’s main priority," said BSP Governor Amando M. Tetangco Jr. "The target holds the BSP accountable for achieving the said target over a two-year period and to communicate more effectively to the public with greater transparency the objectives, the rationale and the methods of monetary policy implementation."
"The target helps guide the public in their investment and consumption plans as well as in their spending and saving decisions over the medium term," he added.
Tetangco again, stressed that the medium-term inflation outlook is that of a decelerating trend.
"The inflation outlook has moderated with the decline in food and oil prices from peaks observed during the early part of the year," he said in a statement. "Demand-pull price pressures are also likely to ease following the expected moderation in domestic economic activity as a result of the global economic slowdown."
As of November, inflation was lower at 9.9 percent from 11.2 percent in October, bringing the nine-month average to 9.4 percent.
The declining international and domestic oil prices have sustained their low-levels, which resulted in the implementation of provisional reductions in public transport fares this month.
For December, the central bank expects single-digit inflation of 9.8-9.9 percent with the peso firming up towards the last weeks of the year due to inflows from remittances.
BSP said that for November, the slower price increases of food and fuel, as well as of transportation and communication services accounted for the slowdown of inflation. Month-on-month headline inflation was negative 0.6 percent, lower than the negative 0.4 percent recorded in the previous month.
Slower year-on-year increases in the prices of rice, cereal preparation, fruits and vegetables, fish, and meat brought down food inflation, while the five rounds of rollbacks in the pump prices of gasoline and kerosene as well as the four rounds of price reductions in the pump price of diesel in November led to lower year-on-year inflation rates for petroleum products, the central bank explained.
BSP said core inflation was slightly higher in November at 7.9 percent compared to 7.8 percent in the previous month. "This developed as the items that experienced marked deceleration in price increases were mostly those that are excluded in obtaining the core inflation measure." Month-on-month core inflation remained at 0.3 percent in November, the same as in the previous month.
