Inflation hit a two-year low of 3.4 percent in February, helped by falling food and energy prices and a stable peso.
"The target for March is 3.5 percent. I think this is also the expectation of the Development Budget and Coordination Council. It supports the five to six-(percent) inflation target (for this year) and even the plan to revise the target to 4.5 to 5.5 percent," NEDA Director General and Socio-Economic Planning Secretary Dante Canlas said yesterday.
Canlas said the oil price hike will not have as much impact as it used to because of the steady decline in the country’s dependence on oil for power generation.
He also said it was unlikely that the Organization of Petroleum Exporting Countries (OPEC) would sanction another around of increase in the prices of oil and petroleum products.
"Even the OPEC recognizes that it could not unduly increase oil prices anymore because there are independent players that would ease them out of the market if their prices are too high," Canlas said.
Once all-powerful, OPEC now has to contend with independent players like Russia, the NEDA chief said. "Moreover, countries like the US have been stockpiling since the Sept. 11 attack and OPEC could no longer use oil pricing as the powerful pressure tool that it is used to. OPEC countries will be more circumspect about arbitrary price increases," he added.
NEDA Deputy Director General Gilbert Llanto, on the other hand, said the assumption of $20.56 per barrel was still valid and was not likely to change dramatically.
Llanto said food supply also remained stable, ensuring that food prices remained stable despite the usual uptick in consumer spending at the end of the school year.
"The March rate supported the planned reduction of the target from five to six percent to 4.5 percent to 5.5 percent for the whole of 2002. The month-on-month comparison indicated a slight increase from 3.4 percent in February," Llanto said.