Consumer prices moved between 2.5 and 3.4 percent, pushed by the momentum of higher costs of cigarette, liquor, electricity and water, the central bank chief said Monday.
“For January, the BSP projects inflation to fall between the 2.5 to 3.4 percent range,” Bangko Sentral Governor Amando Tetangco, Jr. said in a text message to reporters.
The central bank's projection incorporates higher prices of cigarettes and alcohol due to the implementation of Republic Act No. 101351 or the Sin Tax Reform Act of 2012, and the adjustments in electricity and water rates, said Tetangco.
“However, these upside pressures on inflation could be reduced by lower food prices, particularly vegetables, lower oil prices, and the appreciation of the peso against the US dollar,” he added.
Headline inflation moved at 2.9 percent in December from 2.8 percent in November. The December figure pushed the full-year 2012 rate to settle at 3.2 percent from 4.6 percent in 2011.
Last week, the Bangko Sentral cut its inflation forecast to 3 percent from 3.1 percent, while raising the 2014 projection to 3.2 percent from 2.9 percent .
“The latest forecast suggest that average inflation for 2013 and 2014 would settle at the lower half of the government-set target range of 3-5 percent, reflecting continued manageable inflation and well-anchored inflation expectations,” Tetangco said.
The Bangko Sentral “will continue to monitor price developments to ensure that the monetary policy stance remains consistent with the mandate of preserving price stability conducive to sustained economic growth,” the central bank chief noted.
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