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Tuesday, September 07, 2004
August inflation rate hits 6.8%; interest rates steady
MANILA—Consumer prices in the Philippines rose 6.8 percent from a year earlier in August and were likely to follow an upward trend for the rest of the year due to higher oil prices, the government said yesterday.
The August rate was 0.2 percentage points above the July rate of 6.6 percent and brought the year-to-date inflation rate to 4.9 percent.
Accelerate
Economic Planning Secretary Romulo Neri said inflation is expected to “accelerate in the coming months due to high price of oil,” which he said has risen by 11.3 percent to $38.55 a barrel on average compared to July.
“We support the position (of the central bank) that monetary tightening is not the appropriate policy response in dealing with the inflationary pressure that is building up due to cost-push factors,” Neri said in a written statement.
The central bank kept its key rates unchanged late last month, saying they would have limited effect on the supply pressure even though full-year inflation was expected to exceed previous targets.
Typhoons
The National Statistics Office said typhoons and floods had affected food production as well as distribution, while rising fuel prices led to higher transport costs.
Neri warned President Gloria Arroyo to reject “the idea of imposing price controls on goods as this will only cause suppliers, whose costs are rising legitimately, to cut back production and worsen the inflationary pressure.”
Arroyo should also refrain from supporting labor groups’ demands for “legislated wage increases,” he said, adding previous orders that took effect only last month “are likely to exert further inflationary pressures.”
The latest inflation figure is estimated under a new system using 2000 as the base year. (AFP)
(September 7, 2004 issue)
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