'08 inflation may have reached its peak - BSP

MANILA, Oct. 6 (PNA) – The Bangko Sentral ng Pilipinas (BSP) on Friday said inflation this year may have reached its peak earlier than expected but BSP Governor Amando Tetangco Jr. pointed out that this would only be confirmed once the September 2008 figure comes out on Tuesday.

Tetangco has noted the decline in the prices of oil and food, which surged in the second to third quarters of the year.

“It looks like there is a possibility that we are near the peak or inflation have peaked already,” he told reporters.

The BSP chief said this is the situation in other Asian economies, thus, “(it) could happen here also.”

Oil prices almost reached the $ 140 per barrel level in the middle of the year while food prices also posted record high.

However, prices of oil have declined to around $ 100 per barrel while food prices have also declined.

But while Tetangco indicated that rate of price increases may have reached its peak earlier than their forecast of either September or October, he declined to give any specific figures.

Last Tuesday, the central bank issued its inflation forecast for September, which is a range of 11.8-12.7 percent.

The low end of the projection is lower than the 12.5 percent actual inflation last August.

Tetangco on Friday reiterated that the actual inflation will depend on the impact of weather disturbances and the decline of oil and food prices but mum on specific figure.

The central bank targets inflation between three to five percent this year and 2.5-4.5 percent for 2009.

However, the global slowdown, which also results to higher prices particularly of oil and food prompted monetary officials to raise their projection this year and next year.

For this year, BSP projects inflation to average between nine to eleven percent and six to eight percent for 2009.

The figures were originally placed at 3.5-4.4 percent this year and 2.1-3.3 percent in 2009.