Business | Economy
Philippines expects 11% surge in prices
The Philippine central bank said on Monday it expected annual inflation to quicken to between 10.4 per cent and 11.2 per cent in June, the highest in at least nine years, on rising fuel prices and higher wages.
- Reuters
- Published: 23:37 June 30, 2008
Manila: The Philippine central bank said on Monday it expected annual inflation to quicken to between 10.4 per cent and 11.2 per cent in June, the highest in at least nine years, on rising fuel prices and higher wages.
The National Statistics Office will publish the consumer price index on Friday, and inflation of at least 10.4 per cent would mark a significant increase from May, when consumer prices rose 9.6 per cent from a year earlier.
The upper end of the central bank's forecast would be the highest annual inflation since May 1994 when it hit 11.5 per cent.
Deputy governor Armando Suratos said an increase in the price of rice, fruit and vegetables and the depreciation of the peso were additional factors fuelling inflation.
Last month, the central bank raised overnight rates by 25 basis points, the first increase in nearly three years, to tackle inflation.
The monetary authority said it was prepared to take action if commodity-fuelled inflation spread to the broader economy.
The overnight rates currently stand at 5.25 per cent for borrowing, and 7.25 per cent for lending.
Central Bank Governor Amando Tetangco said last week that inflation would likely peak at 10-11 per cent in the third quarter.
He said the economy was strong enough to withstand the impact of further rate hikes, signalling a possible quarter point increase at the central bank's July 17 policy meeting.
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