Inflation creeps higher in August to 4% average

September 8, 2010 6:37 am 

MANILA, Sept. 7 – Inflation crept higher in August to average four percent from only 3.9 percent in July, mostly on the back of adjustments in utilities rates such as those for water and light.

Fuel prices were also adjusted during the period.

Nevertheless, the eight-month inflation rate averaged only 4.2 percent, helping make it possible for the Bangko Sentral ng Pilipinas to keep its own policy rates unchanged in the months going forward.

The regulators would rather that the policy rates remain fixed where they are at present as any upward adjustment as consequence of an overly heated economy, for example, would effectively punish everyone.

Tetangco said the actual four-percent inflation rate in August fell with their forecast for the month ranging from 3.6 percent up to 4.5 percent.

“The actual inflation rate keeps the average inflation rate for the first eight months of the year at 4.2 percent. This supports our view that the inflation environment during the policy horizon remains manageable.

“Nevertheless, we are cognizant that the uneven pace of growth around the globe could produce demand price pressures and volatilities in international commodity prices,” he said in a text message.

Tetangco vowed that he and other members of the policy-making Monetary Board of the BSP “will continue monitoring development to see if there are changes in the inflation outlook that would warrant a change in our policy horizon.”(PNA) DCT/VSV/utb

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