MANILA, Philippines - Inflation is seen to average 3.9 percent this year, faster than last year’s three percent, on the back of higher food prices due to recent calamities and increase in power rates.
In a survey conducted by the Bangko Sentral ng Pilipinas (BSP), economists hiked their 2014 inflation forecast to 3.9 percent from a November projection of 3.5 percent.
The upward revision was on the back of expected increase in food prices due to agricultural damage caused by Typhoon Yolanda in November last year. Moreover, higher demand for commodities on the back of relief operations will also push prices up.
Economists also expected a spike in Manila Electric Co. (Meralco) power rates, although the firm’s planned price adjustment last month was met with a temporary restraining order from the high court.
A total of 29 economists from different banks and organizations were surveyed by the central bank as part of its quarterly Inflation Report.
The lowest 2014 inflation forecast was 2.9 percent, while the highest was five percent.
The central bank sees inflation averating at 4.5 percent this year, near the upper end of the three-to five-percent target range.
BSP Deputy Governor Diwa C. Guinigundo earlier said full-year average inflation could be lower than earlier anticipated although still within the target range.
Guinigundo explained that the central bank, when it made the 4.5- percent forecast in December, already took into account the pending power rate hike. But since such has been put on hold by the Supreme Court, average inflation for the year may settle at a lower figure.
Inflation last year averaged three percent, the low end of the BSP’s three-to five-percent target range.