By Joann Santiago
MANILA, Aug. 28 (PNA) — Faster rate of price increases of some food items and power rates due to weather-related factors were projected to make the August 2014 inflation rate surge to as much as 5.5 percent.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr., in text message to reporters Thursday, said inflation in the eighth month this year is forecast to range between 4.7 to 5.5 percent.
”Lower pump prices of oil are expected to partly offset said increases,” he said.
Supply-side factors have been the main reason for the sustained rise in the country’s inflation rate.
Last July, inflation shoot-up to 4.9 percent, almost hitting the upper end of the government’s three to five percent target for the year.
Average for the seven-month period stood at 4.3 percent.
Monetary officials are confident that inflation rate this year will remain within target as they continue to introduce measures to prevent possible breaching of the target.
During the last policy-meeting of the central bank’s policy-making Monetary Board (MB) last July, the Board set the average inflation forecast for this year to 4.33 percent.
“The BSP stands ready to implement necessary policy actions to ensure that inflation expectations remain well anchored and limit any potential build-up of second round effects of current price pressures,” Tetangco added. (PNA)