Economists forecast lower RP inflation – BSP

Private sector economists have lowered their projected average inflation rate this year to 4.7 percent from 4.8 percent, despite the decision of monetary authorities to raise inflation forecast on higher oil prices and expensive electricity.


A survey of private sector analysts and economists the Bangko Sentral ng Pilipinas (BSP) did in March showed that expectations about prices of goods and services have improved.

The central bank said private economists see inflation averaging 4.7 percent this year, 4.6 percent next year, and 4.4 percent in 2012.

“Analysts noted that the firm peso as well as modest demand conditions will dampen inflationary pressures," the BSP said.

Deutsche Bank AG sees inflation this year at 6 percent followed, HSBC at 5.2 percent, Metrobank Group at 5 percent, RCBC within 4.2 percent to 5 percent, Standard Chartered Bank at 4.6 percent, ATR Kim Eng at 4.2 percent, and Banco de Oro at 3.5 percent.

The survey indicated an average forecast inflation rate of 4.5 percent in the second quarter of the year and 4.7 percent in the third quarter, the Bangko Sentral said.

The BSP has set its inflation target between 3.5 percent and 5.5 percent this year and 3 percent to 5 percent next year.

In April, the BSP’s Monetary Board raised its inflation forecasts to 5.1 percent instead of 4.64 percent this year and 3.7 percent instead of 3.45 percent next year.

But possible increases in wages, public transport fares, and pump prices of petroleum products in June or July could push the inflation rate to six percent, according to monetary authorities.

Inflation eased to 4.3 percent in the first quarter of the year from 6.9 percent year earlier. It quickened to 4.4 percent in March from 4.2 percent in February on the back of higher prices of clothes, fuel, light, water, and services.

Labor groups are pushing for a P25 wage increase across-the-board, while transport groups wants a P0.50 rise in jeepney fares and a P10 increase in the flagdown rate of taxis.

Higher wages would have to be approved by regional wage boards and the fare increase by the Land Transportation Franchising and Regulatory Board.—VS, GMANews.TV