BSP says inflation to stay within target.

(From Philippine Daily Inquirer)

Byline: Doris C. Dumlao

THE BANGKO Sentral ng Pilipinas yesterday said the country's inflation rate would likely average at a manageable 4.1-4.2 percent this year, or at the low end of the government's forecast range of 4-5 percent.

However, the rate is expected to rise to 4.7-4.8 percent next year as consumer prices absorb the full impact of cost-side factors such as volatile movements in crude oil prices, transport fare adjustments, possible increases in utility charges, mounting calls for wage adjustments as well as a possible currency depreciation.

But the inflation forecast for this year and in 2005, presented by BSP research officer-in-charge Iluminada Sicat in a briefing yesterday, would still be well within the government's projected range of 4-5 percent over the two-year period.

"The BSP maintains its assessment of a manageable inflation outlook over the policy horizon," Sicat said. These projections are based on the 1994 consumer price index released by the National Statistics Office.

Asked why inflation is expected to accelerate at a faster pace next year, BSP Deputy Governor Amando Tetangco Jr. said: "There are cost factors that are affecting inflation this year but the full impact is not going to be felt until 2005."