2012 inflation to stay on target amid higher oil prices – BSP
Average inflation will stay within the 3-percent to 5-percent this year and next, according to the Bangko Sentral ng Pilipinas.
The central bank noted that monetary authorities took into account oil prices in their inflation forecast.
“While we must be concerned about oil prices should they rise further, and local pump prices of oil products have started to climb, we are confident inflation will remain within the target for this year and the next of three percent to five percent,” said BSP Deputy Gov. Diwa Guinigundo.
Oil prices between $90 per barrel and $110 were used in setting the inflation target for 2012 and 2013, Guinigundo noted.
US crude for March delivery rose $2.60 to a nine-month high $105.84 per barrel, and Brent crude for April delivery advanced $1.61 to $121.66 — also a nine month high.
“Recent developments in the Strait of Hormuz and the Middle East and North Africa have seen oil prices shooting up precipitously. The European prospective ban of oil imports from Iran has also fuelled concerns about possible retaliation in terms of supply disruption,” said Guinigundo.
Oil price trends between 2011 and 2012 show broadly comparable levels, according to the Bangko Sentral official.
“What mitigates this trend is the relative weakness of the global economy which reduces the demand pressure on commodity prices. Locally, we expect the broad stability of the exchange rate to help dampen imported inflation,” Guinigundo noted.
Inflation averaged 4.8 percent last year from 3.8 percent in 2010.
On Jan. 19, the Bangko Sentral shaved 25 basis points off its policy rates in view of a manageable inflation outlook and slower global economy. The move brought the overnight borrowing rate to 4.25 percent and the overnight lending rate to 6.25 percent.
Central bank’s Monetary Board also raised the reserve requirement ratio to 21 percent from 19 percent in an effort to take out P70 billion from the financial system and curb inflationary pressures from excess liquidity. — VS, GMA News
The central bank noted that monetary authorities took into account oil prices in their inflation forecast.
“While we must be concerned about oil prices should they rise further, and local pump prices of oil products have started to climb, we are confident inflation will remain within the target for this year and the next of three percent to five percent,” said BSP Deputy Gov. Diwa Guinigundo.
Oil prices between $90 per barrel and $110 were used in setting the inflation target for 2012 and 2013, Guinigundo noted.
US crude for March delivery rose $2.60 to a nine-month high $105.84 per barrel, and Brent crude for April delivery advanced $1.61 to $121.66 — also a nine month high.
“Recent developments in the Strait of Hormuz and the Middle East and North Africa have seen oil prices shooting up precipitously. The European prospective ban of oil imports from Iran has also fuelled concerns about possible retaliation in terms of supply disruption,” said Guinigundo.
Oil price trends between 2011 and 2012 show broadly comparable levels, according to the Bangko Sentral official.
“What mitigates this trend is the relative weakness of the global economy which reduces the demand pressure on commodity prices. Locally, we expect the broad stability of the exchange rate to help dampen imported inflation,” Guinigundo noted.
Inflation averaged 4.8 percent last year from 3.8 percent in 2010.
On Jan. 19, the Bangko Sentral shaved 25 basis points off its policy rates in view of a manageable inflation outlook and slower global economy. The move brought the overnight borrowing rate to 4.25 percent and the overnight lending rate to 6.25 percent.
Central bank’s Monetary Board also raised the reserve requirement ratio to 21 percent from 19 percent in an effort to take out P70 billion from the financial system and curb inflationary pressures from excess liquidity. — VS, GMA News
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